SHAH ALAM: Boustead Heavy Industries Bhd (BHIC) on January 8, 2024, announced that Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodynamics Sdn Bhd (CAE) dropped the suit against Boustead Naval Shipyard Sdn Bhd, its associate company.
The release from BHIC to Bursa Malaysia:
Further to the announcements dated 2 September 2022 and 4 October 2022, the Company wishes to announce that both Contraves Advanced Devices Sdn Bhd and Contraves Electrodynamics Sdn Bhd (“the Plaintiffs”) had on 4 January 2024 filed the Notice of Discontinuance to discontinue the suit against Boustead Naval Shipyard Sdn Bhd (“BNS”), a major associate of the Company and accordingly, BNS had on 4 January 2024 withdrawn its Striking Out Application against the Plaintiffs.
The Company will announce further updates on this case from time to time.
This announcement is dated 8 January 2024
It is interesting to note that CAD and CAE had also sued BHIC; subsidiary BHIC Defence Technologies Sdn Bhd and two of its directors apart from BNS. From the release, CAD and CAE have only dropped its suit against BNS. This is likely the reason that the release ended with the line “The Company will announce further updates on this case from time to time”.
It is not explained why CAE and CAD dropped the suit against BNS. It had sought some RM444.24 million payment from BNS. According to a report in the Edge, BNS was to pay CAD RM464.33 million as settlement to resolve commercial issues between them regarding the LCS project.
The damages sought from the other defendants are not mentioned as CAE and CAD asking the court to determine the quantum.
The unresolved litigation is also probably the reason that the full nationalisation of BNS had not taken place. It is unlikely the Attorney-General’s Chambers (AG) will allow a Ministry of Finance Incorporated company to assume control of a private entity with an unresolved litigation.
It is also probably the reason that the AG Chambers had not signed-off the sixth supplementary contract between BNS and the Defence Ministry signed at LIMA 2023 which among others started the process of the full nationalisation of the LCS builder.