Jiankun sues Penang property firm’s directors after failed acquisition, seeks RM12 mil in damages

• The suit pertains to a conditional share sale-and-purchase agreement signed on Dec 22, 2023 under which Jiankun was to acquire 99.99% equity interest in Oriental Link from the two sellers.

KUALA LUMPUR (May 2): Jiankun International Bhd (KL:JIANKUN) is taking legal action against two directors of a property developer for failing to complete the share transfer under a RM9.5 million acquisition deal.

Jiankun is seeking RM12 million in general damages, an exchange filing showed. A writ of summons and statement of claim have been filed against Lee Khoon Eng and Lee Phaik Choo—the directors and majority shareholders of Oriental Link Properties (M) Sdn Bhd—at the Penang High Court on April 28.

"Despite repeated demands and extensions, the defendants failed to complete the share transfer and imposed various additional conditions, resulting in significant delays and financial losses to the company," Jiankun claimed.

The suit pertains to a conditional share sale-and-purchase agreement signed on Dec 22, 2023 under which Jiankun was to acquire 99.99% equity interest in Oriental Link from the two sellers.

The acquisition was to mark the loss-making developer’s entry into the northern Peninsular Malaysia property market and unlock new development prospects for the group.

Jiankun said it had paid RM3.5 million as part of the purchase consideration, and had expected the transfer of 6.27 million shares in Oriental Link to be completed in order to begin project development activities.

In its court filing, Jiankun is seeking a court declaration that the agreement remains valid and enforceable, and that the RM3.5 million payment was made in accordance with the agreed terms. The company is requesting an order for specific performance, compelling the defendants to complete the share transfer within three days.

Alternatively, Jiankun is asking for a refund of the RM3.5 million already paid if the court rules that the agreement is terminated,

Jiankun is also seeking a court order to restrain the defendants from selling or encumbering the shares in Oriental Link as well as the three related property projects—the Panchor Sanctuary Garden in Nibong Tebal, a commercial development on Lot 334 Jalan Paboi, and land in Jalan Kampung Bukit, Bayan Lepas—pending the outcome of the suit.

In addition to the RM12 million in general damages, Jiankun is claiming aggravated and exemplary damages, along with any other relief the court deems appropriate.

The first e-review for the case is scheduled for May 21, 2025.

Jiankun had announced the proposed acquisition of Oriental Link in December 2023 for RM9.5 million to be funded via internal funds. The Penang-based property developer is involved in multiple developments in the state, including the 7.58-acre Panchor Sanctuary Garden project with a gross development value of RM72.69 million.

At the time, Jiankun said the proposed acquisition would enhance its growth prospects and contribute to revenue and profitability.

Shares of Jiankun closed half a sen or 16.67% lower at 2.5 sen on Friday, valuing the group at RM13.73 million.

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