KUALA LUMPUR (July 28): Parkson Holdings Bhd said its 54.67%-owned Hong Kong unit Parkson Retail Group Ltd (PRGL) has won a bid to unfreeze the bank deposits of two subsidiaries that are embroiled in a lawsuit in China.

Parkson said today the court had dismissed the application of China Construction Bank Corp (Changshou branch) to freeze the subsidiaries' deposits, together with Changshou Hang Lung Properties Co Ltd and three others, that totalled RMB212.41 million (about RM134.87 million).

The two subsidiaries, which are indirect wholly-owned by PRGL, are Parkson Investment Holdings Co Ltd (Parkson Investment) and Changshou Parkson Retail Development Co Ltd (Parkson Development).

Changshou Hang Lung Properties, meanwhile, is the landlord of the premises Parkson Development is renting in Hang Lung Centre in Changshou, Jiangsu, for use as department store. The tenancy agreement was originally inked with Parkson Investment, but later transferred to Parkson Development.

Last July, PRGL announced that the two units, together with the landlord and three unnamed parties, had been sued by the bank (plaintiff) in relation to a dispute connected with a loan agreement.

Without providing details, it said it had received a judgment in connection with the case, among which was a court order for the subsidiaries' assets to be frozen, which was enforced immediately upon being served. Subsequently, PRGL applied for the court order to be reviewed and revoked.

Following the judgment review, PRGL issued a statement to the Hong Kong Exchange today that the landlord was ordered to pay the plaintiff the principal and interests owed — together with legal costs specified, and that the plaintiff is entitled to collect from Parkson Development the rental for the premises if the landlord doesn't pay what it has been ordered to.

"The company understands that the plaintiff application (i.e. the plaintiff's application for an order on preservation of properties and requested that the bank deposits of the defendants in the amount of RMB212,405,363, or an equivalent value of other assets, be frozen) was effectively dismissed by the court as a result of the review judgement and, other than as disclosed above, there is no remedy whichconcerns either Parkson Development or Parkson Investment under the review judgement," PRGL added.

The statement was attached with Parkson's Bursa Malaysia filing in connection to the case today.

Parkson shares slid half sen or 0.9% to close at 55 sen today for a market capitalisation of RM586.96 million. Over on the HKEx, PRGL shares settled 1 Hong Kong cent lower at HK$1.27, valuing it at HK$3.35 billion.