Pelangi Prestasi Obtains Stay Against Order To Pay RM85.755 Million To SFI, Two Others

PUTRAJAYA, Nov 11 (Bernama) -- The Court of Appeal today granted an unconditional stay to Pelangi Prestasi Sdn Bhd, a company owned by business tycoon Tan Sri Syed Mokhtar Al-Bukhary, against a recent High Court ruling ordering it to pay RM85.755 million in damages to Sabah Forest Industries Sdn Bhd (SFI) and two others.

The other two respondents are Grant Thornton Consulting Sdn Bhd and Datuk C. Narendrakumar.

A three-member Court of Appeal panel chaired by Judge Datuk Mohamed Zaini Mazlan, with Justices Datuk Hayatul Akmal Abdul Aziz and K. Muniandy, allowed the stay pending Pelangi Prestasi’s appeal against the High Court ruling. The bench also awarded RM30,000 in costs.

On Oct 28 this year, Kuala Lumpur High Court Judge Datuk Su Tiang Joo ordered Pelangi Prestasi to pay RM85.755 million in damages to the two companies and Narendrakumar, ruling that the assessment period for damages would commence from July 2019, with interest running from September 2021.

The judge also noted that there was evidence of another buyer for SFI, and it could have approached or negotiated terms for it, but there had been hindrance from the injunction imposed by Pelangi Prestasi. The High Court had further ordered the company to pay RM100,000 in costs.

In 2018, SFI entered into a Sale and Purchase Agreement (SPA) to sell its assets to Pelangi Prestasi for RM1.2 billion, subject to conditions precedent. SFI granted six extensions to Pelangi Prestasi to fulfil the conditions, chiefly obtaining approval from the Sabah government, including the issuance of fresh timber licences.

On April 30, 2019, the state government confirmed its decision not to issue a fresh timber licence to Pelangi Prestasi. SFI then declared that the SPA had automatically terminated due to non-fulfilment of the conditions within the extended completion period and proceeded with a fresh tender exercise to sell its assets.

Pelangi Prestasi, however, contended that the SPA remained valid and filed a lawsuit on April 12, 2019, alleging that SFI had breached the agreement. At the same time, it obtained an injunction restraining SFI from selling its assets pending the full disposal of the suit.

In 2022, the Court of Appeal struck out Pelangi Prestasi’s 2019 lawsuit against SFI, and the injunction was set aside.

On Jan 18, 2023, the Federal Court dismissed Pelangi Prestasi’s application for leave to appeal to reinstate the lawsuit, and subsequently, on Feb 20, 2023, a notice of application was filed for the assessment of damages.

-- BERNAMA