PRG Holdings Berhad has terminated a settlement agreement involving its subsidiary following alleged non-disclosure issues and payment defaults by the counterparty.
The company said its subsidiary, PCI, issued a notice on May 19 through its solicitors to immediately terminate the settlement agreement with PDM.
The company said PCI discovered that an individual with indirect interests in PDM, together with connected parties, was also a major shareholder of PRG, potentially rendering the settlement agreement a related party transaction.
According to PRG, this relationship had not been disclosed by PDM during negotiations and execution of the agreement.
PRG said PDM had informed PCI in a letter dated May 8 that it was unable to fulfil its obligations under the agreement and had also failed to make the required payments.
The group further alleged that PDM had materially breached the agreement and effectively renounced its contractual obligations.
PRG also claimed PDM failed to disclose a court judgment against it, which the company said appeared to have affected PDM’s ability to carry out its obligations under the settlement arrangement.
Following the termination, PCI has demanded payment of the outstanding indebted sum within 14 days and said it would take necessary legal steps, including initiating court proceedings, to recover the amount.
However, PRG warned that if the outstanding debt is not recovered, the group may need to recognise an impairment loss of approximately RM13.7 million, which could negatively affect its earnings per share and net assets.
