Jiankun hit with RM13 mil demand notice from JV partner for residential project

KUALA LUMPUR (Dec 6): Jiankun International Bhd’s unit has been slapped with a notice of demand from Fivestar Development (Puchong) Sdn Bhd for RM12.98 million linked to a joint venture agreement (JVA) for the development of a residential property in Petaling, Selangor.

In a filing on Tuesday (Dec 6), Jiankun said FiveStar is seeking the payment of RM12.98 million in unpaid sums due and owed by Jiankun’s unit JKI Development Sdn Bhd pursuant to a joint venture agreement dated July 28, 2015, and a supplementary JVA dated Oct 5, 2016.

“As at the date of this announcement (Dec 6), the company is not expected to incur any further loss arising from the notice,” the construction and property development company said.

Jiankun added that the company is seeking legal advice to resolve or defend the legal matter, noting that further announcements on the matter’s developments will be made in due course.

According to Jiankun’s filings, JKI entered into a JVA with Fivestar to develop a 377-unit service apartment on a 8,132-square meter freehold land in Petaling, Selangor, owned by Fivestar. Jiankun had said that the project was to carry a gross development cost of RM147.2 million.

Pursuant to the supplementary JVA, JKI is to pay Fivestar RM36 million or 20% of the gross development (GDV) value less Bumiputera discount, sales rebates and sales packaging cost, whichever is higher. The project’s GDV was estimated at RM180 million.

Shares in Jiankun finished two sen or 7.14% lower at 26 sen on Tuesday, giving the company a market capitalisation of RM84.6 million.