Darco receives originating summons issued by the High Court

DARCO Water Technologies on Monday said that it has been served with an originating summons issued by the High Court, filed by a group of 10 shareholders.

In a bourse filing, the company said that the group of shareholders have applied for leave to commence a statutory derivative action on behalf of the company against non-executive deputy chairman Wang Zhi and Pek Thiam Keong for breaches of their director's duties and/or fiduciary duties owed to the company, and for conspiracy by lawful and/or unlawful means.

On March 17, Darco had disclosed that the group, holding total stakes of 16.1 per cent, had called for legal action against Mr Wang and Mr Pek, accusing the pair of various wrongdoings.

The shareholders alleged that the duo had breached their duties in transactions pertaining to payments for a consultancy agreement entered into by the company, and also in the undertaking by Mr Wang to procure the transfer of a water-treatment asset or concession, and the now-aborted acquisition of a majority stake in PT Panghegar Energy Indonesia in relation to a waste-to-energy project in West Java.

In response to queries from the Singapore Exchange last month, Darco had said that Mr Pek was neither a director, employee nor member of the management of Darco.

The group of shareholders have also applied for leave to commence a derivative action against Mr Wang for fraudulent and/or negligent as well as innocent misrepresentation, and control of the conduct of the derivative action and any execution proceedings following.

Darco said that the 10 shareholders have also applied for, among other things, costs incurred by them up to the hearing of the application in relation to the originating summons, as well as costs of the application, to be paid to them by the company, as well as Mr Wang and Mr Pek.

The group has also submitted an application for the company to pay them for the costs incurred in connection with the derivative action upon leave being granted.

Darco said that it is seeking legal advice on the originating summons and the derivative action to "determine the next course of action".