The Board of Directors of Axis REIT Managers Berhad, the management company of Axis-REIT (the “Manager”) wishes to announce the following in relation to the Originating Summon No. S2 NCVC -84-2011:
1. OSK Trustees Berhad as trustee for Axis-REIT has received an Originating Summon dated 12th January 2011 filed by Hong Leong Marketing Co. Bhd. (Co. No. 52245-H) and Guocera Marketing Sdn. Bhd. (Co. No. 37438-T) (collectively the “Plaintiffs”) at the High Court of Malaya at Kuala Lumpur via suit No S2 NCVC -84-2011 (the “OS”) against OSK Trustees Berhad as trustee for Axis-REIT and Austral Amal Properties Sdn. Bhd. (Co. No. 345239-T) (“AAP”); from whom Axis-REIT acquired Wisma Kemajuan, both as defendants.
2. The OS was served on Axis-REIT on the 18th January 2011 and Axis-REIT has filed in the notice of appearance on the 24th January 2011. On the return date of the OS fixed on the 7th February 2011, Axis-REIT’s appointed solicitors will attend to the necessary court hearing and undertake the defence procedure on behalf of Axis-REIT.
3. Pursuant to the OS, the Plaintiffs are seeking the following declarations:-
(a) A declaration that Axis-REIT is liable to refund to the 1st Plaintiff, Hong Leong Marketing Co. Bhd. (Co. No. 52245-H) the deposits of RM78,830.00 upon the determination of the Tenancy Agreement dated 6th July 2010 and the Supplemental Tenancy Agreement dated 10th December 2010 or any further renewed tenancy between the 1st Plaintiff and Axis-REIT;
(b) A declaration that Axis-REIT is liable to refund to the 2nd Plaintiff, Guocera Marketing Sdn. Bhd. (Co. No. 37438-T) the deposits of RM 391,213.20 upon the determination of the Tenancy Agreement dated 6th July 2010 and the Supplemental Tenancy Agreement dated 10th December 2010 or any further renewed tenancy between the 2nd Plaintiff and Axis-REIT;
(c) Without prejudice to the claim against Axis-REIT, further and/or in the alternative, the Plaintiffs claim against the 2nd Defendant, AAP the following:-
(i) an order that AAP shall pay the sum of RM63,084.00 (comprise of Rental deposit of RM47,238.00 and Utilities Deposit of RM15,746.00 and Letter box deposit of RM100.00) being the 1st Plaintiff, Hong Leong Marketing Co. Bhd.’s (Co. No. 52245-H) Previous deposit for the 1st Plaintiff’s Tenancy to the 1st Plaintiff forthwith;
(ii) an order that AAP shall pay the sum of RM216,595.20 (comprise of Rental deposit of RM 162,446.40 and Utilities Deposit of RM 54,148.80) being the 2nd Plaintiff, Guocera Marketing Sdn. Bhd’s (Co. No. 37438-T) Previous Deposit for the 2nd Plaintiff’s Tenancy to the 2nd Plaintiff forthwith;
4. The above OS arose over the dispute between the Plaintiffs and Axis-REIT as to the liability to refund the Previous Deposits amounting to RM279,679.20 paid by the Plaintiffs to AAP pursuant their respective tenancies with AAP prior to Axis-REIT’s purchase of the property known as Wisma Kemajuan.
5. The Previous Deposits were paid by the Plaintiffs to AAP under their previous tenancy agreements and/or arrangements with AAP (the “Previous Tenancies”). At the point of Axis-REIT’ acquisition of Wisma Kemajuan, both Pengurusan Danaharta Nasional Berhad and AAP represented and confirmed that the Previous Deposits, which have been collected by AAP from the Plaintiffs prior to 1st July 2003 (“Implementation Date”) will not be transferred to or paid over to Axis-REIT on completion of the sale transaction in view that the settlement of these Previous Deposits between AAP and the Plaintiffs have already been settled by virtue of a Workout Proposal approved by the secured creditors of AAP’s holding company, Austral Amalgamated Berhad (“AAB”) and implemented on the Implementation Date, 1st July 2003 (the “Scheme”), in accordance with the provisions of the Pengurusan Danaharta Nasional Berhad Act 1998 (“the Act”) and the Plaintiffs are bound by the terms of the Workout Proposal.
The purchase of Wisma Kemajuan by Axis-REIT was subject to the assignment of all existing tenancies of Wisma Kemajuan valid and subsisting upon the Completion Date. Pursuant to the Novation and Assignment dated 16th December 2005 ( the “said Assignment”) all existing tenancies valid and subsisting on the Completion Date (16th December 2005) were novated and assigned unto Axis-REIT subject to:-
(i) an exclusion from any liability to refund any security deposits not transferred on completion to the Affected Tenants (which includes the Plaintiffs); and
(ii) an indemnity from AAP in the event of any claim from the Affected Tenants arising from the non-transfer of their security deposits paid to AAP.
The tenancy for the 2nd Plaintiff, Goucera Marketing Sdn. Bhd. for all the floors have expired on 30th November 2005, which is prior to the effective date of the said Assignment and as such was not legally assigned to Axis-REIT. Therefore the obligation for Axis-REIT to refund the Previous Deposits amounting to RM216,595.20 does not arise. The tenancy for the 1st Plaintiff, Hong Leong Marketing Co. Bhd. (Co. No. 52245-H), was assigned to Axis-REIT on the Completion Date subject to the exclusion and indemnity provided in the said Assignment.
6. The declarations sought would not have serious financial and operational impact on Axis-REIT in view of the indemnity given by AAP save and except that Axis-REIT will have to incur legal costs for defending the OS and also in seeking indemnity from AAP is the need arises.
7. The Manager will pursue all legal defences and remedies available to contest the OS and will seek to enforce the indemnity from AAP to minimize the financial and/or legal implication of Axis-REIT in respect of this litigation.
This announcement is dated 28 January 2011.
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