KUALA LUMPUR (June 13): Newly-listed Radium Development Bhd’s 80%-owned unit Vistarena Development Sdn Bhd is being sued by 241 individual purchasers for alleged misrepresentation and breach of contract in the sale of its property project in Bukit OUG, Kuala Lumpur.

Vistarena, as defendant, was served with a writ of summons and statement of claim by the individual buyers of Residensi Platinum OUG in Block B (plaintiffs) on June 9.

Prior to the filing of the lawsuit, a meeting was held in October last year to discuss the issues related to the development of Residensi Platinum OUG, which comprises a combined development of condominiums (Block B), affordable housing (Block B) and civil servants housing (Block A) under the same development order.

The meeting was attended by representatives from relevant government authorities, the defendant, architectural consultants, civil and structural consultants, main contractors, and representatives of purchasers from all components of Residensi Platinum OUG.

“However, it was concluded in the meeting that the construction of separate entrances will be put on hold until the formation of the management corporation of the development and defendant to expedite the defect rectification works,” said the property developer in a stock exchange filing on Tuesday (June 13).

This resulted in the plaintiffs — as the legitimate owners of units in Block B — filing suit against the defendant this month, alleging that they had been misled by the defendant's representations about the purchase of the property, specifically the separate entrances between Block A and Block B, which justified a significant price difference.

“The plaintiffs also allege severe defects in the common facilities provided by the defendant. Although some rectification work has been done, the defendant has not completed or rectified the access card facilities or established access control in a shared common area.

“Despite notifying the defendant multiple times about safety-related defects, no action has been taken, and the lack of access separation and clear signage between Block A and Block B is impacting Block B residents’ financial prospects,” said the group.

In addition to the misrepresentation and breach of contract, the plaintiffs are also seeking an injunction against the defendant to take all necessary and reasonable steps to construct two access ways at the entrance to Block A and Block B within three months from the date of judgment.

They also seek exemplary damages from the defendant in the amount of RM25,000 to be paid to each plaintiff.

The suit is now scheduled for first case management on July 3.

Too early to assess financial and operational impact of lawsuit

Acknowledging the concerns raised by the plaintiffs, Radium said it is committed to ensuring a fair and satisfactory resolution to this matter. On the financial and operational impact of the lawsuit, it is premature to determine at this moment, the group said in a statement.

Although some rectification work has been completed, Radium recognised that there are outstanding concerns, particularly with respect to access card facilities, access control, and safety-related defects. “Radium assures all stakeholders that it takes these concerns seriously and is committed to resolving them in a timely manner.

In addition, Radium said it is currently in consultation with its solicitors, and the group will provide timely updates on any material developments related to the lawsuit.

Radium made a weak debut on the Main Market of Bursa Malaysia in late May, losing 23% to 38.5 sen from its initial public offering price of 50 sen.

On Tuesday, the stock closed down half a sen or 1.32% at 37.5 sen, with a market capitalisation of RM1.3 billion.