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San Teh's subsidiary ordered by Yunnan court to pay 11.3m yuan to contractor
SAN Teh announced on Wednesday that its subsidiary Dali San Teh Xing Real Estate has been ordered by the Yunnan court to pay approximately 11.3 million yuan (S$2.3 million) to its main contractor for the return of security deposit of eight million yuan and compensation for work stoppage damages of approximately 4.4 million yuan.
The above sum was offset by progress payment overbilled by the contractor of approximately 1.1 million yuan.
The subsidiary was also ordered to pay interest on the security deposit of eight million yuan calculated based on the People's Bank of China borrowing rate for the period from Sep 11, 2014 up to the payment date, and for the contractor to return the construction site.
The above judgement is expected to have a negative impact of approximately 4.7 million yuan on the group's income statement for the second quarter of the financial year ended Dec 31, 2018 arising from the provision for litigation.
The subsidiary is planning to appeal the ruling.