Pestech hit by arbitration claim over RM7.7m worth of alleged unpaid dues

• Pestech is disputing the claimed amounts. It also plans to file a counter claim against Speco for rectification and repair works that its unit had to undertake, as well as for liquidated damages and other ancillary works that PSB contends is due and payable by Speco.

KUALA LUMPUR (Nov 14): Engineering outfit Pestech International Bhd (KL:PESTECH) said Shandong Power Equipment Co Ltd (Speco) has initiated arbitration proceedings against its wholly owned PESTECH Sdn Bhd (PSB) over what Speco claimed were unpaid dues related to the supply of transformers.

Pestech said PSB had appointed Speco to supply, design and manufacture autotransformers and power transformers, together with ancillary accessories for four substation projects, according to its bourse filing on Thursday.

Speco, however, is now claiming about RM7.7 million that it alleged is an outstanding amount that Pestech has yet to pay it. Speco, who has sought arbitration to settle the dispute via the Asian International Arbitration Centre, is also claiming for general damages and interests that the arbitration tribunal may deem fit to award it.

Of the amount claimed, some RM4.7 million (7.55 million yuan) was for the supply of transformers to three substation projects, namely the Lanchau and Sibiyu substation extensions in Sarawak, and the Junjung project in Kedah.

The remainder, about RM3 million (US$672,000), was for the Olak Lempit project in Selangor.

Pestech is disputing the claimed amounts. It also plans to file a counter claim against Speco for rectification and repair works that its unit had to undertake, as well as for liquidated damages and other ancillary works that PSB contends is due and payable by Speco.

Pestech said it has appointed a legal firm to represent it in the arbitration proceedings.

Pestech’s share price closed unchanged at 13 sen on Thursday, bringing the group a market capitalisation of RM129 million. Year-to-date, the stock has fallen 60% from 32.5 sen.

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