Oxley unit in Cambodia to seek compensation from ex-contractor

Singapore

OXLEY Holdings' subsidiary, Oxley Gem (Cambodia) Co, is planning to seek compensation from its former contractor Sino Great Wall International Engineering Co (SGW) for damages suffered after repeated breaches of its contract.

SGW was the main contractor for The Peak, a 55-storey mixed hotel development project in Cambodia.

In a filing to the Singapore Exchange on Wednesday, Oxley said: "Unfortunately, due to financial difficulties faced by the parent company of SGW and their continued mismanagement of the project, the project was wrought with significant delays and difficulties. In light of the foregoing, Oxley Gem had called on the two performance bonds provided by SGW for the project."

Oxley Gem also terminated the contract with SGW in October last year to prevent any further delays in the development of The Peak.

Oxley Gem has since vetted and appointed another main contractor, China Railway Urban Construction Group Co (CRUCG), a state-owned entity "with strong financials" to finish the project.

However, SGW refused to vacate the project site and wrongfully occupied it, resulting in further delays as the new contractor was unable to begin work, said Oxley.

After commencing legal action, Oxley Gem successfully obtained an injunction order to evict SGW on Feb 14, with the execution of the order taking place on Feb 25.

SGW has now vacated the project site and CRUCG will be begin work as soon as possible, Oxley added. Its Cambodian subsidiary is also planning to seek compensation from SGW for all damages suffered due to SGW's repeated breaches of its obligations under the contract and law.

Shares in Oxley closed at 32.5 Singapore cents on Wednesday, down half a cent.