KUALA LUMPUR (Oct 17): Sunway Bhd said its 70%-owned subsidiary Umech Land Sdn Bhd has not received a formal letter of termination of the joint development agreement from the Penang Development Corp (PDC).

"We will be in a better position to make the appropriate statement regarding the termination of the joint development agreement after receiving and reviewing the letter from PDC," it said in a filing with Bursa Malaysia on Tuesday.

It was commenting on news reports that PDC has decided to terminate its controversial collaboration agreement with Umech Land for the development of Batu Kawan Industrial Park 2 (BKIP2) in Penang.

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Quoting a statement on Penang Chief Minister Chow Kon Yeow’s Facebook page, The Edge reported that the board of directors of PDC said the change in majority shareholders of Umech Land’s equity structure, which was done without informing PDC and without PDC’s approval, “is a serious issue and cannot be accepted by the board of PDC”.

However, the board of PDC maintained that the selection process of Umech Land was transparent and in line with PDC policy.  

The termination of the agreement comes with a three months’ notice, PDC said. Upon the contract’s termination, PDC is instructed to advertise for a request for proposal to collaborate with PDC to develop BKIP2, the statement added.

At noon market break on Tuesday, Sunway shares were unchanged at RM1.90, giving it a market capitalisation of RM9.5 billion. 

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