|  | 

Property News

Tropicana seeks to strike out Sunway’s claim for alleged breach of agreement

KUALA LUMPUR (Oct 11): Tropicana Corp Bhd is seeking to strike out the claim filed by RHB Trustees Bhd, Sunway REIT Management Sdn Bhd and Sunway Education Group Sdn Bhd over its alleged breach of agreement and double-dealing over the sale of shares and a stake in St Joseph International School.
In a statement on Wednesday, the property developer said the claim discloses no reasonable cause of action, is scandalous, frivolous and vexatious, and amounts to an abuse of court process.
“In addition, Tropicana counterclaims against Sunway on grounds that Sunway’s claim [was] filed with ulterior motives and for a collateral purpose to impede, frustrate and interfere with Tropicana’s dealings with its properties and businesses, and further, to injure its good name and business reputation.
“Tropicana contends that Sunway’s claim is baseless as the ‘subject to contract’ letter of offer between the relevant parties was never intended to be legally binding, as evidenced by the expressed provisions therein.
“The letter of offer merely provided for negotiations within specified time periods including an agreed time period for due diligence review wherein Sunway has failed to conduct themselves within such specified periods. Tropicana did not receive any deposit from Sunway,” it said.
Meanwhile, the group also denied allegations of delays and obstructions to the completion of the due diligence review.
Tropicana also stressed that it has provided extensive and sufficient information to Sunway for the purpose of the review.
“Additionally, Sunway has attempted to rewrite its position by seeking a reduction in the agreed purchase price, which is a clear deviation from the salient terms of the letter of offer.
“As the letter of offer was not binding and not enforceable and was legally and properly aborted, Tropicana denies the alleged breach of contract on its part and furthermore, denies the so-called ‘conduct agreement’ which is non-existent and nothing more than a baseless tactic to bolster Sunway’s claim.
“Parties to the letter of offer have never agreed to deal on an exclusive basis and in any event, Tropicana is free to deal with its properties after the proposed transaction was aborted,” it said.
On Tuesday, it was reported that Sunway had sued Tropicana over the St Joseph International School deal.
Sunway claimed that Tropicana had offered to sell Tropicana Education Management Sdn Bhd (TEM), the operator of the school, and a portion of Tropicana shares for an aggregate price of RM208 million in a letter to Sunway dated April 20, 2023.
The letter contains provisions — called conduct provisions — for the purchase of the said property, that it was subsequently agreed between Tropicana Corporation and Sunway that Sunway REIT would own the education institution and Sunway Education Group would own the shares.
Following the understanding, Sunway agreed to pay a refundable deposit of RM4.16 million to Messrs Mah-Kamariyah & Philip Koh on May 2, where it was agreed that upon payment, Sunway is allowed to carry out a due diligence review of the property and TEM within one month from the date (May 2). Sunway claimed that the due diligence period ought to be given a commercially sensible construction.
After the payment of the refundable deposit, a conduct agreement was drawn up, comprising terms, conditions and/or obligations that included Tropicana and TEM as vendors during the due diligence review, and that they comply with the time and obligations. A termination clause was also inserted in the agreement.
The plaintiffs claim to have suffered loss and damages including wasted expenses to comply with the conduct agreement, legal costs due to the agreements made and loss of business opportunity to enjoy from the purchase of the property and shares.
They are seeking declaratory relief that the vendors committed breaches of the conduct agreement, that the due diligence review period be suspended or stayed owing to the vendors’ actions, that the due diligence period be varied, and that the deemed aborted clause is subject to the vendors’ compliance and obligation to provide more information to the plaintiffs.
They are also seeking that the invocation of the deemed aborted clause be declared wrongful, invalid, void and of no effect, and for an order to preserve the status quo of the subject properties.
In addition, they are also seeking special and general damages from the defendants for the wasted expenditure incurred by them.
Tropicana closed one sen or 0.84% lower at RM1.18, giving it a market capitalisation of RM2.71 billion.
Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!

Source: EdgeProp.my

Latest News


Your email address will not be published. Required fields are marked *

Name *

Email *