KUALA LUMPUR (May 16): 1Malaysia Development Bhd (1MDB) has filed a suit against an individual seeking to recover over RM6 million for breaching an agreement involving 234.7 acres of land in Air Itam.
1MDB has named Tan Jiak Chye, 64, as the sole defendant in the suit filed on April 30, according to court documents sighted by theedgemarkets.com.
The case was called for case management today before High Court deputy registrar Idamasliza Maarof, with Tan ordered to file his statement of defence by June 14.
According to the statement of claim, 1MDB was in the process of acquiring the undivided shares or interest in various parcels of lands located around Air Itam town covering an area of approximately 234.7 acres (94.7ha).
Undivided shares in a piece of land means that the land has a single title listing several parties as its owners; the land has not been subdivided into separate plots with their own titles.
1MDB, through Aluminium Development Company Sdn Bhd (renamed to Ayer Itam Properties Sdn Bhd, AIPSB) purchased the entire issued share capital of Gerak Indera Sdn Bhd (GISB) and Farlim Properties Sdn Bhd (renamed to AI Real Estate Sdn Bhd [AIRESB]), which collectively held about 75.68% of the total undivided shares or interest in the Air Itam Estate.
1MDB said a letter dated May 3, 2013 was sent to Tan proposing to exchange the undivided shares or interest in the lands in Air Itam Estate with the latter.
“This is whereby Tan is to exchange or procure the exchange of approximately 14.3% undivided shares or interests in the Air Itam Estate held by him and Chong Sie Cheong, Choong Lye Hock Estates Sdn Bhd (holding in trust for the estate of the late Chor Phaik Sim) and Ng Peng Wah to 1MDB or its subsidiary, in return for certain parcels of lands in the Air Itam Estate,” said the claim.
Tan accepted the proposal contained in the letter and was paid RM6 million pursuant to the agreement by 1MDB on the same day.
On or around September 23, 2013, 1MDB through its property arm 1MDB Real Estate (Ayer Itam) Sdn Bhd (formerly AIPSB) acquired part of the undivided interest in three parcels of land in the Air Itam Estate.
As a result of the acquisition, 1MDB through GISB, AIRESB and AIPSB held approximately 85.7% of the total undivided shares or interests in the Air Itam Estate.
According to 1MDB, after the agreement was entered into between the company and Tan, the company took all reasonable steps to fulfill its obligations to procure the release and discontinuance of the pending suits against Tan and other land holders.
However, in breach of the agreement, Tan has failed, refused and/or neglected to perform his obligations under the agreement to exchange or procure the agreement of the other holders to exchange the lands with 1MDB or its subsidiary.
“As a result of the defendant’s failure to perform his obligations under the agreement, the exchange of land has not been completed to date,” the company claimed.
Currently, 1MDB no longer owns any interest in GISB, AIRESB and AIPSB.
The company claimed that under the agreement, Tan is obliged and liable to return RM6 million to the company as the exchange of lands failed to take place by reason of Tan’s failure to exchange or procure the agreement of the other holders to exchange the lands with the company or its subsidiary.
“It would be unjust for the defendant to retain the sum of RM6 million which represents a benefit received by the Defendant at the expense of the plaintiff,” stressed the company in the claim.
The company said Tan has failed, refused and/or neglected to return the money by April 26, 2019 after receiving a letter dated April 23, 2019 from its solicitors.
Therefore, the company decided to pursue the matter in court.
The case now fixed for further case management on June 28.