Koh Brothers shares continue tumble over significant exposure from major legal disputes

[SINGAPORE] Shares of Koh Brothers Eco Engineering (Koh Eco) fell further on Wednesday (Aug 19), a day after it disclosed three major legal disputes which potentially expose it to nearly S$57.6 million in liabilities.

The counter fell almost 6 per cent to S$0.097 at 10.56 am, after dropping almost 10 per cent on Tuesday. By 11.23 am, the counter was at S$0.098, still 4.9 per cent down, after almost 5.7 million shares changed hands.

Shares of parent company Koh Brothers Group were down as much as 11.1 per cent or S$0.03, hitting an intra-day low of S$0.24 at 9.40 am. By 11.23 am, the parent counter pared some of its losses to sit at S$0.25, still 7.4 per cent down.

On Tuesday morning, Koh Eco flagged a maximum exposure of S$20.5 million in a joint-venture (JV) dispute, alongside a S$23.3 million consortium arbitration and a subcontractor claim of up to S$13.78 million. The total amount in potential liabilities comes to 20 per cent of its market capitalisation of about S$290 million.

The engineering and construction company said that the Singapore High Court on Aug 6 dismissed applications by its subsidiary, Koh Brothers Building & Civil Engineering Contractor (KBCE), to set aside partial arbitration awards. The JV partner then applied to the tribunal for final payment orders on Aug 7.

KBCE intends to file a counterclaim against the subcontractor and stated that it has not made financial provisions for the suit at this time.

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Koh Brothers Eco Engineering faces up to S$57.6 million in potential legal liabilities

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On Tuesday, Koh Eco also held an extraordinary general meeting at which shareholders voted in favour of moving the company to the Singapore Exchange mainboard.