Court orders Khee San to pay RM16.76m, interest to Bank of China

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KUALA LUMPUR (Dec 5): The High Court has ordered Khee San Bhd to pay the Bank of China (Malaysia) Bhd RM16.76 million, together with interest, in the suit that the bank filed against the candy maker to demand repayment of a defaulted loan.

This was among the terms contained in a consent judgment delivered by the court today, and agreed to by the parties, after they appeared for the hearing of BoC's summary judgment application and Khee San's stay of proceeding application, Khee San said in a stock exchange filing.

According to the judgment, Khee San and its wholly-owned Khee San Food Industries Sdn Bhd shall pay a sum of RM16.76 million as at Nov 20, 2019, with interest of 1.25% per annum above BoC’s base lending rate (BLR) — which as at Nov 21 was at 6.6% per annum on daily rests — and an additional interest of 1% per annum from Nov 21 until the date of full settlement, with costs of RM15,000.

"The execution of the judgment is stayed for six months on the terms and conditions stated in a Messrs Skrine’s letter to Messrs Krish Maniam & Co dated Dec 5, 2019," Khee San said.

Messrs Skrine is representing BoC, while Messrs Krish Maniam & Co is representing Khee San and Khee San Food Industries.

In the event that Khee San and Khee San Food Industries do not comply with the terms and conditions stated in the letter, BoC shall be at liberty to demand for the entire sums due immediately, Khee San said.

With the consent judgment recorded, the court directed that BoC's summary judgment application and Khee San's stay of proceeding application be withdrawn by mutual consent, with no order to costs.

BoC initiated the suit against Khee San and Khee San Food Industries in August this year, after the latter defaulted on a loan repayment amounting to RM14.62 million. Subsequently, Khee San claimed BoC had committed a breach of conduct as it was still in talks with the bank to negotiate the terms of repayment.
 
Khee San's shares closed up 12.5 sen or 35.21% to 48 sen, giving it a market capitalisation RM54.91 million.

The stock's rally came after news broke that snack manufacturer Mamee-Double Decker (M) Sdn Bhd, which was once listed on Bursa Malaysia, is buying into the financially strapped company through a share placement, which will be followed by a cash call.

Mamee-Double Decker intends to take up 94 million new shares, representing about 45.11% of the candy manufacturer’s enlarged issued capital, at 25 sen each. Consequently, it will be obliged to extend a mandatory general offer (MGO) for the remaining Khee San shares that Mamee-Double Decker has not already held. Mamee Double-Decker, however, intends to maintain Khee San's listing status on completion of the MGO.