TA Global commences arbitration proceedings

KUALA LUMPUR (June 2): TA Global Bhd’s (TAG) wholly-owned unit Crystal Caliber Sdn Bhd (CCSB) has commenced arbitration proceedings against Saudi royalty-owned Kingdom Hotel Investments (KHI), following a dispute between the parties relating to the breach of the sale and purchase agreement (SPA) dated April 25, 2012, concerning a resort property in Thailand.

KHI is founded by Saudi billionaire investor Prince Alwaleed Talal, who is worth US$22.8 billion (RM84 billion), according to Forbes.

According to TA Global’s filing with Bursa Malaysia, the dispute arose from breaches by KHI of the said SPA, whereby KHI had agreed and covenanted to pay CCSB any tax liability and cost before May 31, 2012.

To recap, the SPA entailed the acquisition of the hotel and business of Mövenpick Resort and Spa Karon Beach Phuket in Thailand, by TA Global from KHI, for a total consideration of US$90.21 million (equivalent to RM276.94 million at that time).

“The estimated amount of claim in the Request for Arbitration by CCSB is in respect of the withholding tax liability claimed by the Phuket Revenue Office against: i) Siam Recovery Holdings Co Ltd — amounting to 495,222.17 baht  (RM54,174.66); and ii) Siam Resort Co Ltd — amounting to 118,850,681.35 baht” said TA Global.

The two firms are the owner and operating company of the hotel property known as Movenpick Karon Beach Resort — a 4-star hotel with 175 guestrooms, 163 suites and villas and 30 beachfront 2-bedroom apartments located on Karon Beach.

CCSB is also claiming for interest and costs arising from the matter.

“The company is of the opinion that the commencement of arbitration proceedings are in its best interest to preserve CCSB’s rights in the SPA,” said TA Global.

TA Global does not expect the arbitration proceedings to have any material impact on its financial position for the financial year ending Jan 31, 2016.

KHI is owned by Kingdom Holding Co, which is headed and founded by Prince Alwaleed.

TA Global gained 0.5 sen or 1.59% to 32 sen yesterday, bringing its market capitalisation to RM1.68 billion.

This article first appeared in The Edge Property pullout, on June 2, 2015.

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