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Tung Lok to 'vigorously defend' late payment penalty claims by Beijing firm

GIVING an update on a civil complaint filed against its Beijing subsidiary by China National Decoration (CND), Tung Lok on Friday said CND has lodged an application document to the People's Court of the City of Beijing to increase the late payment penalty it is asking for from two million yuan (S$446,000) as previously filed to nine million yuan.

Tunglok's Beijing subsidiary, My Humble House in Beijing (Restaurant) Company Ltd (MHHB), has been advised by its solicitors that the late penalty claim of nine million yuan made by CND is of little merit. CND is an interior and exterior decoration company.

"MHHB intends to take all necessary steps to vigorously defend the alleged claims as well as counterclaim CND for its breach of the terms and conditions of the renovation agreement and the consequential liquidated damages. The solicitor is currently actively preparing for the lawsuit to defend MHHB's interests," Tung Lok said in a filing to the Singapore Exchange.

MHHB and CND had entered into the renovation agreement in December 2012 to spruce up a restaurant operated by MHHB's 70-per-cent owned subsidiary. CND now also wants to include this restaurant operator as a joint defendant.

MHHB has disputed that the amount due to CND amounted to 1.55 million yuan, as CND had defaulted on the terms and conditions of the agreement by failing to obtain the fire safety certificate required by the restaurant.

According to the agreement, MHHB can claim one million yuan from CND for failing to do so.