We refer to our earlier announcement dated 28^th April 2010. 

The Company wishes to announce that its subsidiary, Boustead Naval Shipyard Sdn Bhd (“BNS”), had on 25 March 2011 been served with a Writ of Summons dated 13 January 2011 and Amended Statement of Claim dated 10 March 2011 by one Meridien Shore Sdn Bhd (In Liquidation) (“Meridien”).

Under the said Writ of Summons, Meridien is claiming against BNS for specific damages in the amount of RM49,577,510.10, interest at 8% per annum on the said amount of RM49,577,510.10, general damages, cost and other relief that the Court deems fit over alleged losses suffered by Meridien arising from foreclosure of several of its lands in Johor (“Lands”) by Bank Kerjasama Rakyat Malaysia Berhad (“Bank Rakyat”). 

Meridien is alleging that it had created third party charges over the Lands as a form of security for a financing facility granted by Bank Rakyat to BNS for the sum of RM15 million. It was also alleged by Meridien that Bank Rakyat foreclosed and auctioned off the Lands because BNS had defaulted on its repayment obligations to Bank Rakyat.

The High Court has fixed the matter for case management on 28 March 2011.

BNS has appointed solicitors to handle this case while its Directors, in consultation with the solicitors, are of the view that BNS has a good defence to this claim by Meridien.