JAKS drops with KLCI and after co says seeking arbitration

KUALA LUMPUR (March 7): Shares of builder and pipe manufacturer JAKS Resources Bhd fell as much as seven sen or 4% to RM1.55, amid broader market losses and after JAKS said its 51%-owned unit JAKS Island Circle Sdn Bhd is seeking arbitration to resolve its dispute with Star Media Group Bhd.

According to JAKS' statements to Bursa Malaysia, the dispute involves a RM50 million bank guarantee provided by JAKS Island Circle to Star, as obligation for completion and delivery of Tower A in a property project within Petaling Jaya's Section 13.

Yesterday, JAKS said: "Reference is made to the company's announcement on 19, 21, 23 and 26 February 2018 on subject matter. The board of directors of JRB (JAKS Resources) wishes to inform that the solicitors of JAKS Island Circle has served a notice of arbitration pursuant to clause 19.2 of the sales and purchase agreement dated 19 August 2011 to resolve all disputes between the two parties by way of arbitration, including issues arising from the claim by Star on interest and the call on the bank guarantees."

At 10:33am today, JAKS' shares were traded at RM1.57 with 395,200 units traded. In the broader market, the FBM KLCI fell 9.08 points at 10:48am to 1,839.29, with global markets.

Reuters reported global stocks and the dollar slumped on Wednesday, after a key advocate for free trade in the White House announced his resignation, fanning fears President Donald Trump would go ahead with tariffs and risk a trade war.

White House economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the Trump administration, said on Tuesday that he is leaving. — theedgemarkets.com

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