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Rich Capital unit issues letter of demand against JV partner
RICH Capital Holdings' indirect subsidiary Oxley Batam has issued a letter of demand against a joint-venture partner, which has denied the allegations in the letter, Catalist-listed Rich Capital said on Wednesday night.
Oxley Batam issued a Nov 4 letter of demand against PT Karya Indo Batam (PT KIB), with which it had formed joint venture PT Oxley Karya Indo Batam (PT OKIB).
The letter of demand alleges that a total of S$8 million in advance payments were made by Oxley Holdings, on behalf of Oxley Batam, to PT KIB director Poni Madjukie. The sum comprised S$5 million for the property cost of a project at Oxley Convention City in Batam, for which the JV had been formed, and S$3 million for the attainment of the required development licences.
The letter alleges that PT KIB is in breach of a joint-operation agreement (JOA) and an Aug 12, 2016 shareholders' agreement, in causing the termination of the JOA and associated agreements as well as the cancellation of powers of attorney granted to PT OKIB in another lawsuit.
This has caused losses and damage to Oxley Batam, including but not limited to the S$8 million, the letter alleged. Oxley Batam gave PT KIB until Nov 11, by which it had to provide written confirmation that it would repay the advance payments.
On Nov 9, PT KIB issued a letter in response, denying the allegations in Oxley Batam's letter of demand.
Rich Capital said it is "in consultation with its legal advisors on the proper course of action to protect its interests, and will make further announcements as appropriate to update shareholders accordingly".
In a separate announcement, Rich Capital said that a case brought by piling contractor PT Pratama Widya Tbk against PT OKIB and PT KIB, as well as several other parties as co-defendants, has been revoked.
The case had commenced on July 14, 2020, with PT Pratama seeking compensation for alleged breach of contract in relation to works on the Oxley Convention Centre project.
Rich Capital said that on Nov 5, it received written confirmation from its Indonesian counsel that, based on publicly available information, the Batam District Court granted the revocation of the case on Oct 22.
Rich Capital said it will make further announcements as appropriate to update shareholders accordingly. Trading in the company's shares has been suspended since June 2019.