News

Tan Chong Motor Holdings Berhad (“TCMH” or “the Company”) wishes to announce that the Kuala Lumpur High Court (“High Court”) had on 12 July 2017 decided to allow Meka Automotive Industries Sdn Bhd’s (“MEKA”) application to transfer the legal proceedings in respect of  TCM Stamping Products Sdn Bhd (“TCMSP”), a wholly-owned subsidiary of the Company’s claim against MEKA for the sum of RM316,829.00 in respect of the supply of automotive accessories (“TCMSP’s Claim”) and MEKA’s counterclaim in the sum of RM16,500,000.00 made by MEKA against TCMSP inter alia, for alleged loss of business (“MEKA’s Counterclaim”) from the Kuala Lumpur Sessions Court (“Sessions Court”) to the High Court. TCMSP’s solicitors had on 14 July 2017 informed the Sessions Court of the aforesaid decision.

TCMSP had on 18 August 2016 filed TCMSP’s Claim against MEKA in the Sessions Court and subsequently, MEKA filed MEKA’s Counterclaim against TCMSP with the Sessions Court. Pursuant thereto, MEKA made an application to the High Court to transfer the legal proceedings from the Sessions Court to the High Court (“Application to Transfer”).

On 4 November 2016, TCMSP filed a striking out application against MEKA’s Counterclaim of RM16,500,000.00 in the Sessions Court and an Affidavit in Reply to oppose MEKA’s Application to Transfer on grounds, inter alia, that the MEKA’s Counterclaim is out of the jurisdiction of the Sessions Court, which has jurisdictional limit up to RM1,000,000.00 only. On 5 December 2016, TCMSP’s solicitors attended the case management before the Sessions Court and the High Court.

Status

TCMSP has sought necessary legal advice from its solicitors with regard to MEKA’s Counterclaim and instructed its solicitors to defend the said MEKA’s Counterclaim. Based on the advice of TCMSP’s solicitors, TCMSP is of the view that it has a reasonably good chance of succeeding in recovering the TCMSP’s Claim with costs as it is a plain and straightforward case of goods sold and delivered case. MEKA’s Counterclaim is totally unsubstantiated and therefore, highly unsustainable.

Financial and Operational Impact

Should TCMSP fail in its opposition of the MEKA’s Counterclaim, TCMH is of the opinion that the Group is able to fulfill the commitment to the abovementioned MEKA’s Counterclaim. With the MEKA’s Counterclaim, the net asset per share of the Group will be reduced by 3 sen. There is no impact to TCMSP’s business operations.

Other than the above, TCMH is of the opinion that the MEKA’s Counterclaim has no other significant financial and operational impact to the Group for the current financial year.

Further announcements will be made from time to time in respect of any material developments on this matter.

This announcement is dated 18 July 2017.