HB Global Limited (HBG) and its subsidiary SLH Infra Sdn Bhd have filed a civil suit in the Kuala Lumpur High Court against six parties over HBG’s RM66 million acquisition of a 60% stake in Forward Resources and Construction Sdn Bhd (FRC) in 2021, alleging fraud, fraudulent misrepresentation and conspiracy to defraud.
The company said it and SLH Infra filed the statement of claim on Sept 4 against Lee Ping Wei, Chee Chen Hao, Lean Kock Kiang, Lee Sek Ang, FRC (in liquidation) and Choong Poh Ling.
The suit also includes allegations of breaches of fiduciary and statutory duties, dishonest assistance, knowing receipt and conversion. HBG stressed that the claims and allegations remain subject to determination by the court.
The dispute centres on HBG’s acquisition of FRC, which was undertaken after representations that the company had secured 5G fibre infrastructure projects worth approximately RM1.07 billion.
HBG entered into a share sale agreement with Lean Kock Kiang and Lee Sek Ang on April 1, 2021 to acquire a 60% equity interest in FRC for RM66 million.
Of the purchase price, RM54 million was satisfied through the issuance of HBG shares, while RM12 million was paid in cash. The acquisition was subsequently completed in July 2021.
HBG said its decision to proceed with the transaction was fundamentally based on representations that FRC had secured 5G fibre infrastructure projects with an aggregate value of about RM1.071 billion.
Following completion of the acquisition, FRC announced that it had accepted a purported letter of award from On Site Services Sdn Bhd (OSS) for fibre implementation works valued at RM10 million.
However, HBG said it subsequently became aware that the purported letter of award had not been issued by OSS and that no legally binding agreement existed for the works.
HBG then commissioned investigations into the acquisition and related transactions.
According to the plaintiffs, the investigations uncovered facts and circumstances indicating that the acquisition and related transactions formed part of an alleged coordinated scheme to deceive and/or defraud HBG and SLH Infra.
A police report was subsequently lodged on Sept 6, 2021.
