SINGAPORE - Hoe Leong Corporation will proceed with its Singapore High Court lawsuit against Sumatec Resources and its former managing director Chan Yok Peng, after a RM27 million (S$9 million) settlement agreement reached in March was not approved by the Official Receiver of Malaysia.
The heavy equipment maker said that the agreement was not approved because of issues relating to whether the Official Receiver would be able to deal with redeemable convertible preference shares (RCPS).
Under the settlement agreement between Hoe Leong, its 80 per cent owned unit Ebony, Sumatec and Mr Chan, Sumatec was supposed to pay part of the settlement sum by issuing RCPS in Sumatec worth RM20 million to Ebony. This was on top of a RM7 million cash payment to Ebony.
Hoe Leong said that this means the settlement agreement will cease to have effect.
The parties to the settlement agreement had previously agreed on May 4 to extend the approval date to June 6.