PETALING JAYA: Prestariang SKIN Sdn Bhd (PSKIN), a subsidiary of Prestariang Bhd, has filed a legal claim totalling RM732 million from the Malaysian government for the termination of the RM3.5 billion National Immigration Control Systems (SKIN) project via expropriation.
The legal action comes after Prestariang said the company and the government were unable to reach an amicable settlement despite multiple rounds of negotiations.
Prestariang told Bursa Malaysia that the sum is calculated based on the contractual formula provided in the concession agreement signed by both parties.
“In its legal claim, PSKIN highlights that the concession agreement (CA) clearly spells out the government’s obligations in the event the project is unilaterally terminated by way of expropriation. Prestariang wish to reiterate PSKIN has never defaulted on the CA. Despite the agreement for a 15-year concession, the government unilaterally terminated the CA by way of expropriation, which took effect on Jan 22. PSKIN strongly believes that the CA was fair and reasonable,” it stressed.
Under the CA signed in 2017, PSKIN was to design, deliver, maintain and provide scheduled upgrades for an improved immigration and border control system for Immigration Department Malaysia.
PSKIN was to received approximately RM3.5 billion over a 15-year concession period, with the entire capital expenditure of the project to be borne privately by SKIN.
Prestariang said since 2014, PSKIN had undertaken extensive technical studies and work thus incurred a substantial amount expenses relating to the project.
The company had also entered into numerous third-party contracts in their execution of the project.
The amount of compensation and other requested reliefs cannot be ascertained at this juncture and will depend on the outcome of the legal proceedings against the defendant.
Prestariang is positive on its claims against the government and it does not anticipate any significant operational impact to the group.
“The company is of the view that there will not be any losses arising from the originating summons save for the legal fees that may be incurred in relation to legal representation for PSKIN in the immediate future.”
Prestariang’s share price declined 7 sen or 11.7% to close at 53 sen today on 49.74 million units done.