• “For the first time in 40 years, the group has missed the deadline as required by Bursa Malaysia. The group understands the importance of transparency and wishes to address the challenges it is currently facing. The board of directors today has directed the initiation of necessary accounting measures to accurately reflect in the financial statement.”

KUALA LUMPUR (March 1): Having missed the Feb 29, 2024 deadline to release its fourth quarter ended Dec 31, 2023 (4QFY2023) results, Country Heights Holdings Bhd (CHHB) is likely to be slapped with a trading suspension.

“The company wishes to announce that the fourth quarterly results for 2023 is delayed as the Malaysian Department of Insolvency is still in the midst of verifying the claims amount between the creditors and Mines Waterfront Business Park Sdn Bhd (MWBP), an indirect wholly-owned subsidiary of the company that is in liquidation, due to non-substantiated claims. The management is also in the midst of negotiation with a bank on the defaulted loan,” CHHB said in a bourse filing on Monday, adding it is addressing the challenges and targets to announce its 4QFY2023 results this month.

CHHB securities will be suspended on March 8 following the expiry of the suspension deadline and will be uplifted on the market day following the issuance of the outstanding quarterly results unless otherwise determined by Bursa Securities, the filing added.

On Friday (March 1), CHHB said it acknowledged the concerns regarding the timely updates of the group’s financial announcement but said it is optimistic that it will turn around by next year.

“For the first time in 40 years, the group has missed the deadline as required by Bursa Malaysia.

“The group understands the importance of transparency and wishes to address the challenges it is currently facing. The board of directors today has directed the initiation of necessary accounting measures to accurately reflect in the financial statement,” it said.

CHHB said dealing with MBSB Bank, the Malaysian Department of Insolvency (MDI), and 23 Century International Life Science Centre (23 Century) have delayed its financial updates and the verification of the figures in the book. However, the group is actively taking steps to engage with its counterparts and to address these challenges.

CHHB said that Amy Siew, one of the purchasers of MWBP succeeded in her legal suits against the company to terminate the sales & purchase agreement during the handover of the property. Instead, she submitted claims for Liquidated Ascertained Damages.

“Following the court judgment, for the property valued at RM600,000, the claim totalled RM1.1 million. During the negotiation, a reduced amount was agreed, and RM75,000 was paid to her lawyer. However, Siew’s winding-up petition was still enforced against MWBP’s subsidiary, which has led to other creditors also filing their proof of debts, which is now totalling RM3.8 million, with the admission of debt still pending MDI’s decision.

“The company through its lawyer has committed to resolve the matter expeditiously and has deposited RM390,000 to be paid to MDI, equivalent to 10% of the amount, even though the claim of RM3.8 million is not accurate and verified yet. Today, the BOD has decided to adopt the figure of RM3 million for the book, and for the account to be announced,” it explained. 

Secondly, CHHB refused the claims that it owed a total sum of RM180 million for the financing facilities owned to MBSB Bank as reported in the media in Dec 2023. 

“These figures were inaccurate for MWBP and Mines International Exhibition and Convention Centre (MIECC). The accurate figures are estimated to range between RM72 million to RM79 million, and this loan is under the Islamic loan scheme, which is far from the figures that were previously reported,” it noted.

In light of these developments, CHHB said the BOD has instructed the initiation of necessary accounting measures to accurately reflect the group’s financial position based on the correct estimate of RM79 million.

On the settlement with MBSB Bank, MWBP has received a proposal for settlement from MBSB Bank dated Nov 17, 2023, to pay an upfront payment of RM1 million and the remainder of RM500,000 monthly, to be paid over 24 months and this is subject to the offer by the MDI for the case to be discharged.

CHHB said that adding to the accounting problem, were some of the debtors of MWBP, such as 23 Century, which had not paid rent up to RM3.8 million, under the winding up situation. “The account and audit have taken a very careful approach to address the situation,” CHHB added. 

For public information, CHHB said MWBP and MIECC are valued at RM550 million as per current market value.

“For inquiries regarding the sales and acquisition of the assets, potential stakeholders may approach the company directly, instead of dealing with other parties.

“The group remains committed to addressing these challenges transparently and responsibly, and appreciates the continued support of its stakeholders during this time,” it added.

In December last year, MBSB Bank Bhd said it is seeking a claim amounting to RM89.67 million from MIEC, and RM91.44 million from MWBP.

With that, the bank is seeking the High Court's approval to sell two pieces of land belonging to CHHB's subsidiaries (MWBP and MIEC) through a public auction over the subsidiaries' default on the payment of Islamic term financing facilities.

CHHB had announced its default on the payment of the RM89.67 million financing facilities in August last year and attributed the default to differences in cash flow timing due to delays in client payments, resulting in a temporary cash-flow constraint.

For the nine months of FY2023 (9MFY2023), CHHB's net loss widened to RM14.69 million, from RM13.34 million a year before while revenue rose 18.77% to RM37.72 million from RM31.76 million previously driven by the sale of completed properties units.

It attributed the 9MFY2023 net loss increase to the provisional write off of the licence fees of RM1.3 million from Beijing Wodong Tianjun Information Technology Co. Ltd.

At 3.30pm, the share price of CHHB was unchanged at 27.5 sen, translating into a market capitalisation of RM82 million.

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