Property News

Kumpulan Jetson says it is not a party to disputed contract under OCR’s RM88 mil suit

KUALA LUMPUR (Nov 7): Kumpulan Jetson Bhd (KL:JETSON), which is being sued by OCR Group Bhd (KL:OCR) over alleged breaches of an RM88.03 million contract to build four blocks of serviced apartments in Jalan Yap Kwan Seng here, said on Thursday it is not a party to the disputed contract as Jetson Construction Sdn Bhd (JCSB) — which was contracted to undertake the job — is no longer its subsidiary.

In a bourse filing on Thursday, Kumpulan Jetson said the legal action involves claims related to a RM4.4 million corporate guarantee it provided to JCSB for the construction of the project during the contract period.

As it is not a party to the contract and JCSB is no longer a subsidiary, Kumpulan Jetson said its obligations under the guarantee are no longer enforceable. It has also filed a defence in response to the suit initiated by OCR and its 50.01%-owned unit O&C Makok Isola Sdn Bhd (OCMI).

Kumpulan Jetson was named as the second defendant in the suit that OCR initiated in early October as it has provided JCSB with the corporate guarantee. JCSB was awarded the contract in July 2018 but OCMI terminated the job four years later in September 2022.

In March this year, OCMI initiated the arbitration against JCSB to claim for RM30.88 million, or a sum to be assessed by the tribunal, for additional costs relating to the appointment of a replacement contractor to complete the serviced apartments.

Shares of Kumpulan Jetson closed 0.5 sen or 2.4% lower at 20 sen apiece on Thursday, giving the group a market capitalisation of RM75.26 million.

OCR closed unchanged at three sen, with a market capitalisation of RM100.23 million.

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Source: EdgeProp.my