KUALA LUMPUR: A subsidiary of Magna Prima Bhd, Ibsul Development (Sel) Sdn Bhd, has filed a writ of summons and statement of claim against Selangor’s property development arm Perbadanan Kemajuan Negeri Selangor (PKNS), to claim special damages amounting to RM2.42 million.

“The reason leading to the writ of summons was due to termination by PKNS on the said sale and purchase (S&P) agreement with regards to Plot B which Ibsul asserts was unlawful,” said Magna Prima in a filing with Bursa Malaysia yesterday.

Magna Prima (fundamental: 1.1; valuation: 1.4) said Ibsul, a unit of its wholly-owned subsidiary Winicon (M) Sdn Bhd, had taken legal action against PKNS for specific performance in order to compel the latter to fulfil all its obligations relating to the sale and purchase agreement dated Aug 5, 2009.

According to the filing, the S&P agreement relates to the purchase of land at the price of RM18.5 million. The purchase price of Plot A and Plot B amounted to RM11.1 million and RM7.4 million, respectively. The purchase price of Plot A was fully paid by Ibsul and Ibsul has completed the development of Plot A, it said.

“The expected losses are restricted to the costs of the land of Plot B of RM7.4 million, and costs of development of RM4.45 million,” Magna Prima said.

However, PKNS terminated the S&P agreement for Plot B. Consequently, Magna Prima sought to claim special damages amounting to RM2.42 million, as well as general damages, interest and costs, from PKNS.

Magna Prima shares closed unchanged at RM1.12 yesterday, giving it a market capitalisation of RM372.84 million.

This article first appeared in The Edge Financial Daily, on May 20, 2015.