Eco-Shop faces lawsuit over alleged unauthorised demolition of Penang premises

KUALA LUMPUR (July 31): Eco-Shop Marketing Bhd (KL:ECOSHOP) is facing a lawsuit from a property owner over alleged breach of a tenancy agreement and unauthorised demolition of premises in George Town, Penang.

In a Bursa Malaysia filing on Friday, the dollar-store retail said it had received a writ of summons and statement of claim from Messrs Ismail, Khoo & Associates, acting on behalf of Cheng Heng Yew and Cheng Kar Tong, against the company and five other defendants.

The other defendants include Eco-Shop Marketing Sdn Bhd, which was the entity's name before its conversion into a public company, as well as individuals including Kong Ken Meng, Chin Pik Fong, Low Wan Cheong and Lee Koi Chin.

The plaintiffs are seeking, among others, a court order requiring Eco-Shop to rebuild the premises at No 262, Jalan Gurdwara, George Town, Penang within two years, as well as payment of monthly rent or compensation of RM35,000 until the issuance of the Certificate of Completion and Compliance (CCC).

The plaintiffs are also seeking an order for Eco-Shop to provide a RM20 million security deposit or bank guarantee as a guarantee for the restoration or reconstruction of the premises.

In addition, the plaintiffs are claiming various damages, including specific damages amounting to RM5.18 million, exemplary damages of RM10 million, aggravated damages of RM10 million, interest, costs and other reliefs deemed fit by the court.

Eco-Shop said the claims arose from alleged breaches of the tenancy agreement between the company and Cheng, as well as the alleged unauthorised demolition of the premises, which resulted in losses suffered by the plaintiffs.

The company said it is currently seeking legal advice from its solicitors to resolve and/or defend against the claims.

Eco-Shop added that it is currently unable to ascertain the full financial impact arising from the claims as the matter remains at a preliminary stage and is subject to the outcome of the court proceedings.

Shares of Eco-Shop closed down one sen or 0.7% to RM1.47 on Friday, giving it a market capitalisation of RM8.46 billion.

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