Sapura Resources assets at risk due to JV default, court told
KUALA LUMPUR : Public-listed entity Sapura Resources Berhad (SRB) defaulted on a joint venture agreement (JVA) in 2022, placing the company's assets at risk, Sapura Holdings Sdn Bhd (SHSB) director Shahriman Shamsuddin told the High Court today.
Testifying at the hearing of his petition to wind up SHSB, Shahriman acknowledged that SRB had breached the terms of the JVA by failing to meet a RM40 million cash call made by Impian Bebas Sdn Bhd.
Impian Bebas is a joint venture vehicle set up by SRB and KLCC Holdings Sdn Bhd (KLCCH) to develop Permata Square, a 52-storey tower in the KL city centre – the Sapura group's flagship building.
Cross-examined by S Rabindra, counsel for elder brother Shahril – a respondent in the petition – Shahriman conceded that a default would have carried 'onerous' consequences.
Rabindra: If SRB defaults under the JVA, does KLCCH have the right to acquire SRB's properties at a 20% discount?
Shahriman: Yes.
Rabindra: And no one wanted that to happen, as indicated in your letter to KLCCH dated Aug 1, 2022?
Shahriman: Yes.
To avoid the consequences of a default, Shahriman said he issued the Aug 1 letter to KLCCH which contained a 'without prejudice' offer to resolve the matter, hoping for a positive response.
Rabindra: Would you agree that KLCCH was uninterested in responding (to your letter)?
Shahriman: Yes.
Rabindra then pointed to a statement in Shahriman's petition which referenced a subsequent SRB board meeting, held on Sept 7, 2022, where several potential solutions were discussed.
The lawyer also referred to the minutes of that meeting, said to contain a proposal made by Shahril – dubbed Option 4 – which involved selling SRB's stake in Permata Tower.
Rabindra: (Was) Option 4 (discussed) within SRB's board?
Shahriman: No.
Shahriman is seeking to wind up SHSB, the parent entity of over 40 subsidiaries valued at RM832 million, including the publicly listed SRB.
Both Shahril and Shahriman hold a 48% stake in SHSB, with the remaining 4% owned by Rameli Musa, also named as a respondent.
In the petition filed last September, Shahriman claims that an irreparable breakdown in mutual trust and confidence between him and Shahril necessitated SHSB's dissolution.
However, SHSB, Shahril and Rameli oppose the petition, contending that SHSB was never intended as a family business and that dissolution would be neither just nor equitable.
The hearing continues before Justice Leong Wai Hong.
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