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The Board of Directors of Sersol Berhad ("SB" or "the
Company") wishes to announce that the Company's wholly-owned subsidiary,
Multi Square Sdn Bhd ("MSSB"), had by its solicitors Messrs Ringo
Low and Associates served a statutory demand dated 26 August 2014 on E W
Plastic Sdn Bhd ( the Respondent ). The amount claimed is RM1,973,149.36 due and owing by the Respondent
to MSSB for goods supplied and delivered, which was outstanding since November
2013.
Details of Circumstances
The details of circumstances leading to the above are as follows :
1) MSSB which carries out the business of manufacturing and selling paints has
been supplying paint to the Respondent based on agreed credit terms. Mr Lee Chee
Meng, a director of the Respondent, also stood as a guarantor for the Respondent
in respect of the credit sales granted by MSSB pursuant to a Letter of
Guarantee dated 9 May 2012.
2) The Respondent has from time to time made payment towards account
leaving the balance sum of RM1,973,149.36 due and owing as at 7 August 2014.
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Financial and Operational Impact
In the event that MSSB is unable to recover the amount claimed of RM1,973,149.36
from the Respondent, MSSB and/or the Company will make the necessary provision
as doubtful debts should the recoverability of the debt is not foreseeable.
Operational impact and other damage arising from the legal actions leading
to the Company's loss of revenue, weaker financial standing, weaker cashflow,
incurred finance interest and other consequential losses, cannot be ascertained
at this juncture. The impact and damage to the Company will be dependent on
sequential actions, if any, taken by the Company.
Other than the legal costs, interests and the non-recoverability of the amount
claimed of RM1,973,149.36 which is due and payable by the Respondent to MSSB,
the Company does not expect to suffer any further losses.
As mentioned above, other losses to the Company, including consequential
losses, cannot be ascertained now.
However, the Company wishes to inform that the Company will make the
necessary provision in the accounts of the Company should the recoverability of
the debts is not foreseeable.
Steps taken and proposed to be taken by MSSB
The Petition having been presented to the Court on 10
October 2014. The hearing is fixed on 5 December 2014 at
9.00 a.m.
SB will announce any material development arising from the above
proceedings at the appropriate time.
Directors Statement
The Board of Directors of SB is of the opinion that the statutory demand
is in the best interest of the Company.
This announcement is dated 28 October 2014.