KUALA LUMPUR (Aug 29): Pasukhas Group Bhd has been dragged into an arbitration proceeding by the main contractor for the 118-storey Menara Warisan Merdeka project, over an alleged breach of subcontract works worth RM14 million.
The main contractor is Samsung C&T Corp UEM Corp Construction JV Sdn Bhd — a joint venture between South Korea-based Samsung C&T Corp and UEM Group Bhd.
Menara Warisan Merdeka is owned by PNB Merdeka Ventures Sdn Bhd, a unit of the country's largest money manager Permodalan Nasional Bhd.
In a filing to Bursa Malaysia, Pasukhas said the claims launched against its 70%-owned unit Pasukhas Construction Sdn Bhd by the main contractor were over alleged wrongful repudiation and negligence in performing the work.
"Pasukhas will make further announcements on any material development on this matter from time to time," it added.
The group noted that the claim by Samsung C&T Corp and UEM came after it was awarded under the Construction Industry Payment and Adjudication Act 2012, which had on Aug 16 awarded it with RM1.64 million in sum owed, together with a 5% interest rate calculated from Feb 24, 2017.
Meanwhile, Pasukhas announced that its net profit fell 48.72% to RM40,000 in the second quarter ended June 30, 2017 from RM78,000 a year ago, while revenue dropped 52.37% to RM7.67 million from RM16.1 million previously.
"The decrease was mainly attributable to a slowdown in activities on ongoing projects for local Civil Engineering and Construction services projects which translates into lower revenue," Pasukhas said.
For the first six months of the year, Pasukhas' net profit slumped 53.62% to RM186,000 from RM401,000 a year ago, as revenue more than halved to RM14.23 million from RM34.29 million.
On prospects, Pasukhas expects to maintain a "sustainable growth and improved profitability for the foreseeable financial years".
Pasukhas' share price rose 0.5 sen or 3.45% to close at 15 sen yesterday, for a market capitalisation of RM121.74 million. — theedgemarkets.com