KUALA LUMPUR (April 14): Penang property developer Hunza Properties Bhd announced a suit brought against it by Loke Wan Yat Realty Sdn Bhd (Loke Realty) would not have any material operational, financial or loss impact on the company.
In a filing with Bursa Malaysia today, Hunza’s subsidiary Hunza Properties (Gurney) Sdn Bhd (HPG) stated it had received a writ and statement of claim, both dated March 18, from Loke Realty’s solicitors on April 13.
Hunza (fundamental: 1.70; valuation: 1.80) said that Loke Realty had outlined a series of claims and relief from HPG, in a suit filed in Penang High Court on March 29.
It added that Loke Realty is the registered proprietor of 91-year-old Loke Mansion that sits on Lot 298, Section 1, along Gurney Drive, which is adjacent to HPG’s development on Lots 39, 296, 1237, 1238, 2349 and 2350.
The Loke Mansion, which faces the sea, was built by philanthropist Wong Loke Yew’s son Alan Loke in the mid 1920s.
To recap, Hunza pointed out that on or about July 2006, Loke Realty had raised its objection against HPG’s proposed development on the said lands to then Penang Island Municipal Council (MPPP) (now Penang Island City Council).
“On Dec 5, 2006, MPPP approved HPG’s building plans. Upon receiving MPPP’s approval, HPG commenced development of the lands.
“Subsequently, whilst development was ongoing, HPG also carried out restoration works on Loke Mansion, which was certified by independent conservation architect BK Ooi Architect in their letter dated June 20, 2012,” it stated.
However, Loke Realty commenced legal proceedings against HPG for claims and reliefs for the loss of rentals in the aggregate sum of RM352,000 for the period of 44 months between March 2009 and October 2012, at a monthly subsidised rental of RM4,000 otherwise payable by the Loke Mansion tenants.
Loke Realty is also claiming for maintenance costs totalling RM140,000 at RM3,500 per month in monitoring the security, and upkeeping and maintaining the mansion.
The claims also include monitoring and attendance costs totalling RM140,000 at RM3,500 per month in monitoring the impact of the piling and/or construction works, and to meet with HPG and MPPP.
Hunza added that professional fees totalling RM298,649 comprising fees, general damages for negligence amounting to RM500,000, exemplary and aggravated damages (RM500,000), and general damages for nuisance (RM250,000) were also claimed.
Loke Realty also sought an injunction that HPC take immediate necessary measures to rectify the ventilation and exhaust ducts.
Hunza stated that its solicitors opined the alleged claims for loss of rentals, maintenance costs, monitoring and attendance costs, and professional fees are unsustainable and/or too remote.
“The solicitors also expressed that HPG has a valid and sustainable defence against Loke Realty’s claim of negligence and nuisance, as HPG had taken all reasonable care and/or acted reasonably in carrying out the development on its lands. The solicitors also said HPG has a good and/or meritorious case.
“We hereby state that the suit is not expected to have any material operational impact to the group. Further, the suit is not expected to have any material financial impact and/or material losses to the group,” it stated.
Hunza's shares closed unchanged at 2.35 today, with a market capitalisation of RM528.95 million.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)