PRG Holdings Bhd’s wholly owned subsidiary, Premier Construction (International) Sdn Bhd (PCI), has initiated legal action against property developer Premier De Muara Sdn Bhd (PDM) by serving a statutory demand for RM64.24 million in unpaid construction-related claims.
The group said the statutory demand was served on June 8 pursuant to Section 466(1)(a) of the Companies Act 2016 following the termination of a settlement agreement between the parties announced last month.
The dispute stems from PCI’s role as the main contractor for the Picasso Residence development in Kuala Lumpur, where PDM acted as the project developer.
According to PRG, PCI is seeking RM64.24 million, representing certified construction work completed and rendered under the project but allegedly remaining unpaid by PDM.
The Picasso Residence project has already been completed, with the Certificate of Practical Completion obtained in November 2025.
PRG said the statutory demand is not expected to have any material operational impact on the group as the project is substantially completed and only defect liability obligations remain. The company added that provisions and accruals relating to these obligations had already been made in its financial statements for the financial year ended Dec 31, 2025.
From a financial perspective, the group has already recognised impairment losses totalling approximately RM64 million against amounts owed by PDM. This includes RM50.3 million recognised in previous financial years and a further RM13.7 million recognised in the financial period ended March 31, 2026.
The company noted that an additional impairment of approximately RM200,000 may be required, subject to management assessment and audit review.
PRG said no significant losses are expected to arise directly from the statutory demand apart from legal and related recovery costs.
Under the Companies Act, PDM has 21 days from the date of service to settle the outstanding amount. Failing that, PCI intends to commence winding-up proceedings against the developer without further notice.
The group added that any successful recovery of the outstanding debt could result in a future reversal of impairment losses, subject to applicable accounting standards.
