KUALA LUMPUR (Aug 11): Boustead Holdings Bhd confirmed that it has filed a suit at the High Court against its former managing director Tan Sri Che Lodin Wok Kamaruddin and five former directors, seeking £6.4 million (RM35.37 million).
However, the diversified conglomerate, which is controlled by Lembaga Tabung Angkatan Tentera with a 59.42% stake, pointed out that the writ is yet to be served.
"The writ is yet to be served," it said. "Announcement on the development of the above matter will be made in due course."
Boustead also confirmed that the claim is "up to £6.4 million or other sum deemed fit by the court, for breaching their fiduciary obligations as directors under the Companies Act 1965".
Referring to an article by theedgemarkets.com, Boustead said the writ "has indeed been filed on June 29, 2020" against the six individuals.
Apart from Lodin, others are former chairman Tan Sri Mohd Ghazali Che Mat, as well as former directors Datuk Azzat Kamaludin, Datuk Francis Tan Leh Kiah, Datuk Seri Ghazali Mohd Ali and Datuk Wira Dr Megat Abdul Rahman Megat Ahmad.
Lodin resigned in November 2018, while Mohd Ghazali retired as Boustead chairman in July last year. The other four directors, too, left the group last year.
Boustead had been subject to criticism due to high debt strain from its expansion exercises.
It resulted in a total borrowing of RM7.9 billion against shareholders' equity of RM3.74 billion at end of last year.
Amid high debt and shrinking cash flow as its businesses underperformed, Boustead was in the red in the financial year ended Dec 31, 2018 (FY18) and in FY19, when it opted for a RM1.15 billion kitchen-sinking to tidy its books.
It is currently said to be undertaking a debt restructuring of RM5.4 billion plus the rationalisation of non-core assets to improve cash flow.