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Jetson’s termination of JV a sign of brewing tussle

KUALA LUMPUR: Kumpulan Jetson Bhd’s subsidiary Jetson Construction Sdn Bhd has terminated its joint venture agreement with China State Construction Engineering (Hong Kong) Ltd which was entered into to build Platinum Park here.

The parties have mutually agreed to terminate the JV deal which was entered into on May 6 for the purpose of jointly submitting a tender on Naza TTDI Sdn Bhd’s invitation to develop a 38-storey office block and 10 levels of podium for Platinum Park in Jalan Stonor in the KL City Centre.

In an announcement to Bursa Malaysia yesterday, Jetson said the termination stemmed from the inability of the parties and Naza TTDI to reach a consensus in relation to the payment arrangement in respect of the first progress payment.

“Upon the termination, the joint venture agreement is null and void and the parties shall have no further claims against each other,” Jetson said, adding the termination was not expected to have any material effect on the group’s earnings, net asset and gearing for the financial year ending Dec 31, 2010.

Naza TTDI is part of the Naza group now helmed by sons of the late Tan Sri SM Nasimuddin SM Amin — Sheikh Mohd Nasarudin and his brother Sheikh Mohamad Faliq Sheikh Mohamad Nasimuddin Kamal.

The Naza brothers took over Jetson in August last year. Apart from Platinum Park, the Naza group will also be developing the Matrade land in Jalan Dutamas, which the group obtained in a swap arrangement.

In March 2007, Naza TTDI had proposed to the government to build a new trade exhibition centre for the Malaysia External Trade Development Corporation (Matrade).

In exchange for a new RM628 million Matrade Centre, Naza TTDI will develop a 62.5-acre piece of leasehold land.

The company plans to build residences, offices, a shopping mall and a hotel over the next 10 years. Its gross development value is estimated to be RM15 billion.

A sign that all’s not well at Jetson?

The termination of the JV appears to confirm earlier rumours that all is not well within Jetson’s board, specifically between the Naza brothers — Jetson’s chairman Nasarudin and vice-chairman Mohamad Faliq — in one camp, and another faction led by Datuk Teh Kian Ann, Jetson’s managing director.

When the Naza brothers bought into Jetson last year, the little known company was widely seen as the construction vehicle for the Naza group’s many property projects. Indeed, the stock soared on the news, given the Naza connection.  

The first indication of something amiss emerged when Jetson executive director Chow Chee Kin gradually acquired a 4.3% stake in the company, which some alleged triggered a mandatory general offer if he had acted in concert with the Naza brothers.

However, in an announcement to Bursa Malaysia Securities on June 16, Jetson had stated that Chow and the brothers were not acting in concert. Then, on July 7, Jetson announced that independent director Mohd Najib Abdul Aziz had resigned.

A week later, on July 14  the company said Najib had retracted his resignation. The very next day, the board announced another surprise — that Najib’s resignation was valid and properly executed.
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