CEO Morning Brief

ATA IMS Unit Sued by Industrial Products Supplier Over RM2.57 Mil Claim

Publish date: Thu, 27 Apr 2023, 08:45 AM
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TheEdge CEO Morning Brief
ATA IMS unit sued by industrial products supplier over RM2.57 mil claim

KUALA LUMPUR (April 26): ATA IMS Bhd said its wholly-owned subsidiary, ATA Industrial (M) Sdn Bhd (AIM), is being sued by an industrial products supplier over a RM2.57 million claim.

The Johor-based electronic manufacturing services (EMS) group said the amount claimed by Intag Industrial Supplies Sdn Bhd from AIM consists of payment for finished goods.

In a bourse filing, ATA IMS said the goods supplied by Intag was used in the assembly of products for one of AIM's customers, based on said customer’s order forecasts.

“On Nov 25, 2021, the company announced that the customer had terminated its business contracts with the defendant (AIM) with effect from June 1, 2022.

“The plaintiff (Intag) claims that as at end of December 2022, they have a stockholding of RM2.57 million, which the defendant had yet to instruct the plaintiff to deliver the goods.

“And in January 2023, the plaintiff sent notices to the defendant to take delivery of the goods and to pay the amount of RM2.57 million,” it said.

AIM informed Intag in March 2023 that it was still engaged in talks with the customer and would revert to them once a resolution can be worked out.

However, Intag proceeded with legal action before this can achieved, ATA IMS said.

“Currently, the suit is not expected to have a significant impact on the operations of the defendant (AIM) and ATA IMS,” it noted.

The group said if the claim is allowed by the court, the financial impact will be the damages claimed, and any costs or interest granted.

At this juncture, the group is seeking legal advice before deciding its next course of action.

“The company will make the necessary announcements to Bursa Malaysia Securities Bhd as and when there are further developments or upon receipt of further direction from the court," it added.

ATA IMS's share price closed unchanged at 28.5 sen on Wednesday (April 26), bringing the group a market capitalisation of RM337.52 million.

Source: TheEdge - 27 Apr 2023

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