SHAH ALAM: More details on BNS/BHIC legal woes. As part of its annual report, Boustead Heavy Industries Corporation Bhd, the publicly listed engineering subsidiary of Boustead Holdings Bhd, published the legal actions taken against the company for its shipbuilding activities. The shipbuilding activities is undertaken by its associate company, Boustead Naval Shipyard. For the record, BHIC posted a loss for the 2022 financial year.
Anyhow, BNS is facing two legal action: the first one is by MTU Services Sdn Bhd and Contraves Advanced Devices Sdn Bhd (“CAD”) and Contraves Electrodynamics Sdn Bhd (“CED”). For the second legal action, BHIC ,BHIC Defence Technologies Sdn Bhd (“BHICDT”) and two directors are also named as defendants.
The MTU case:
BNS was served with winding up petition on 3 July 2020 by Plaintiff. By the Petition, MTU Services (Malaysia) Sdn Bhd (“MSM”) alleges that BNS is indebted to them for the total sum of RM56.0 million for the equipment supplied and services provided to BNS.
On 11 August 2020, BNS has then filed an interlocutory application to Stay/Strike Out the Winding Up Petition filed by MSM on a few grounds.
On 29 March 2021, the Judge has allowed for BNS’s Application to Strike Out the Petition. MSM filed an appeal on 21 April 2021. However, the Case Management for this Appeal has been rescheduled a few times in conjunction with BNS’s Application for the Restraining Order.
During the Case Management on 27 May 2022, MSM’s solicitors have informed the Court of Appeal that MSM is currently not withdrawing the appeal. The Court of Appeal had fixed the next Case Management on 31
October 2022 and the hearing on 14 November 2022.
BNS has since July 2022 paid half of the amount owed. MSM had written to Court requesting for adjournment of the hearing scheduled on 14 November 2022 pending settlement negotiation with BNS.
The Court has allowed MSM’s adjournment request. The date initially fixed for hearing on 14 November 2022 was converted to a Case Management during which the Court has allowed for the case management and hearing to be rescheduled to 12 June 2023 and 26 June 2023 respectively.
The Contraves case:
On 27 September 2022, Plaintiffs filed a Writ of Summons and Statement of Claim (Kuala Lumpur High Court Suit No. WA-22NCC-485-09/2022) against the 3 Companies and 2 BHICDT Nominee Directors in CAD.
• Reliefs Sought by CAD and CED:
1. A declaration that the 12 letters of award (“LOAs”) to the
Plaintiffs, from BNS are still valid and subsisting;
2. BNS pays CAD :
a. RM 880,068.21;
b. Euro 39,871,994.66;
c. Great Britain Pound 3,784,937.02; and
d. Swedish Krona 55,938,157.90;
3. BNS pays CED the alleged outstanding amount of
4. An order by way of specific performance of the 12 LOAs;
5. Damages in lieu of and/or in addition to the specific performance to be assessed by the Court, alternatively, damages to be assessed and/or sums to be determined for
6. A declaration that the Nominee Directors have allegedly breached their fiduciary duties and/or common law duties and/or statutory duties under the provisions of Companies Act
7. A declaration that BHIC and/or BHICDT and/or BNS had allegedly dishonestly assisted and/or aided and abetted and/or was an accessory to the Nominee Directors alleged breach of their respective fiduciary duties and/or common law duties and/or statutory duties owed to the Plaintiffs under the provision of Companies Act 2016;
8. A declaration that BHIC and/or BHICDT and/or BNS and/or the Nominee Directors had allegedly wrongfully conspired and/or combined with each other and/or acted in concert to injure and/or defraud the Plaintiffs;
Reliefs Sought by CAD (contd.):
9. A declaration that BHIC and/or BHICDT and/or BNS and/or the Nominee Directors had allegedly wrongfully procured and/or induced any or all CAD’s and/or CED’s OEMs under the LCS Project to breach the OEM’s respective LOAs with CAD and/or CED and/or unlawfully interfered with the actions of any or all CAD’s and/or CED’s OEMs and/or the OEM’s respective LOAs with CAD and/or CED;
10. An injunction to restrain BHIC and/or BHICDT and/or BNS and/or the Nominee Directors whether by itself/himself, its directors, agents, servants, nominees or otherwise howsoever from continuing with the alleged breach and/or assistance of the alleged breach of the Nominee Directors respective fiduciary duties and/or common law duties and/or statutory duties under the provisions of CA 2016 including but not limited to sections 213, 217 and 218 owed to CAD and/or CED;
11. An injunction to restrain BHIC and/or BHICDT and/or BNS whether by itself, its directors, agents, servants, nominees or otherwise howsoever from directly communicating and/or contracting with CAD’s and/or CED’s OEMs under the LCS Project in connection with and for purposes of any of the scope of work under the 12 LOAs for the LCS Project;
12. An injunction to restrain (Dr.) Salihin and/or Dato’ Syed Zahiruddin whether by himself, his agents, servants, nominees or otherwise howsoever from utilising, disclosing, distributing, propagating or otherwise howsoever from any internal documents and/or information of the Plaintiffs to any unauthorised persons and/or general public;
15. Cost; and
16. Such further and/or other relief as the Court may deem fit and
just to grant.
• The Board has appointed Messrs Lim Chee Wee Partnership
to represent the Company, BHICDT and BNS in the suit.
I am not lawyer but my understanding of the suit indicated that any statements regarding the completion of the LCS project by third quarter of 2024 is irresponsibly optimistic. The legal materials also vindicated by my opinion that it will be easier to shut down the LCS project altogether.
— Malaysian Defence