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Darco Water issues letter of demand against former CEO
DARCO Water Technologies is alleging that its former chief executive officer (CEO) and director Thye Kim Meng breached his duties to the company in relation to a water project and a solar project, causing losses and damages to the company.
The Catalist-listed firm, through its solicitors Solitaire LLP, issued a letter of demand dated Aug 12 against Mr Thye, alleging these breaches and quantifying the losses and damages at US$1.6 million.
Darco demanded that he provide written confirmation, no later than Aug 12, that he will pay the US$1.6 million amount less any sums that the company may recover.
Darco previously proposed to acquire a solar power farm in Con Dao, Vietnam, as well as a 90 per cent stake in Can Guioc Water Works, under the direction of Mr Thye. However, Darco last week announced that the water project was not commercially viable and thus requested a full refund of the US$1 million partial payment that had been remitted to the seller for the proposed acquisition.
The management had been in discussions with the counterparties to these two transactions to determine the feasibility of continuing with the water and solar projects, and to recover the payments that had been made in advance, should a decision be made to exit from any of the projects.
Mr Thye was a director of the company from October 2001 to May 2019 and held key appointments within the group during his tenure, including as the managing director from March 2002 to May 2019, and as CEO from June 2002 to May 2019.
Darco on Thursday said its solicitors will take all necessary steps to protect the company's interest, including commencing legal proceedings against Mr Thye if he fails to comply with the letter of demand.
Shares of Darco last traded at S$0.16 on July 13.