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Property News

Jiankun’s unit hit with another lawsuit from ex-JV partner concerning residential project

KUALA LUMPUR (Feb 2): Jiankun International Bhd’s wholly owned unit JKI Development Sdn Bhd (JKID) has been hit with another lawsuit by a former joint venture (JV) partner Fivestar Development (Puchong) Sdn Bhd, demanding RM14.21 million in alleged unpaid sums.
The latest suit against JKID concerns the same joint venture agreements signed between the two parties in 2015 and 2016 to co-develop a residential property project in Puchong.
“The claim by Fivestar for the alleged outstanding sum of RM14.21 million being the purported estimated balance landowner entitlement is an unconcluded matter between Fivestar and JKID,” Jiankun said in a Bursa Malaysia filing on Friday.
In December 2022, JKID received a notice of demand from Fivestar for RM12.98 million linked to the Puchong residential property development joint venture.
However, the notice of demand was later declared by a court as “an abuse of court’s process” in April 2023. JKID also obtained a declaration from the court that there were “bona fide issues” in its dispute with Fivestar, as well as a declaration that Fivestar’s notice of demand was “not bona fide but an act to apply undue pressure on JKID to pay sums that are disputed and not due and owing from JKID”.
The unit also managed to obtain a prohibitory injunction against Fivestar from filing any winding-up petition against JKID, together with general damages to be assessed from Fivestar.
On the new RM14.21 million claim by Fivestar, Jiankun said it will not significantly affect the financial position of the group, as a sum of RM12.94 million had been provided for in the accounts.
“Should the court decide in favour of Fivestar and award them judgement on the claimed sum of RM14.21 million, the additional impact of RM1.27 million, interest and cost to the group performance will not affect the operation of JKID [or] the group,” it said.
According to Jiankun’s filings, JKID entered into the joint venture deal with Fivestar to develop a 377-unit service apartment on a 8,132-square metre freehold land in Puchong, owned by Fivestar.
At the time, it said that the project’s estimated gross development cost was RM147.2 million, and that it carried an estimated gross development value (GDV) of RM180 million.
Under the joint venture deal, JKID was to pay Fivestar RM36 million, or 20% of the GDV less the Bumiputera discount, sales rebates and sales packaging cost — whichever was higher.
The project has been completed, and vacant possession was handed over to buyers in February 2022.
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Source: EdgeProp.my

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