Parkson Retail Asia warns of ‘adverse impact’ on full-year financials in light of unit’s legal woes

PARKSON Corporation, a unit of Parkson Retail Asia, was served with an amended writ and statement of claim dated Sep 3 as part of its ongoing legal proceedings with PKNS Andaman Development.

In a filing to the Singapore Exchange on Friday (Sep 8), Parkson Retail warned that its financial position for the financial year ending Dec 31 would see an “adverse impact” if the outcome of the legal proceedings do not ultimately wind up in its unit’s favour, and if the unit is required to settle the amended claims in full. 

The ongoing legal battle is with respect to the premises leased by PKNS to Parkson Corporation within Evo shopping mall. 

PKNS had on Sep 6 served Parkson Corporation with the amended claims and writ. It offered Parkson Corporation the choice between two payment structures. 

The first option asks for a payment by Parkson Corporation of about S$3.2 million to PKNS for the rental from Apr 2, 2018, to June 2023 and the monthly payment of about S$53,403 until the settlement of the rental amount. 

The second option – an alternative to the first structure – is asking for the payment of about S$3.4 million to PKNS for the rental period from Feb 27, 2018, to June 2023, and the monthly payment of S$53,403 until the settlement of the outstanding rental.

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PKNS also asked Parkson Corporation to settle the outstanding monthly rental within 14 days of the judgement. 

Parkson Retail said it maintains its position that no rental is payable by its unit, as PKNS has failed to satisfy the precedent as set out in the tenancy agreement. 

The precedent pertains to the trigger of rental commencement, and Parkson Retail said PKNS’s act of issuing commencement notice pursuant to the agreement backdating the commencement date of rental without satisfying the conditions precedent is unlawful. 

Parkson Retail said its unit has been advised by its solicitors that it has a “strong case for maintaining its position” and has instructed its solicitors to file its defence. 

The trial dates are from Nov 20 to Nov 24, it said, adding that it will make further announcements as and when material developments arise.

Shares of watch-listed Parkson Retail fell 2.7 per cent or S$0.002 on Friday to finish the week at S$0.072.