KUALA LUMPUR (Aug 3): QL Resources Bhd said its wholly-owned subsidiary, QL Oil Sd Bhd (QLO), has commenced arbitration proceedings against two Indonesian firms to resolve disputes relating to a master joint venture agreement (MJVA) signed by the three parties in 2006.

QLO filed the notice of arbitration against Hang Ting Pte Ltd (HT) and PT Pipit Citra Perkasa (PCP) at the Singapore International Arbitration Centre on Thursday (Aug 3), said QL Resources in a bourse filing.

Under the MJVA, QLO and HT formed a joint venture company known as QL Mutiara (S) Pte Ltd, which in turn owns a 95% stake in plantation firm Pipit Mutiara Indah (PMI), with PCP holding the remaining 5% stake.

QLO thus has an effective interest of 74.5% in PMI, whereas HT and PCP collectively have an effective interest of 25.5% in PMI.

QL Resources said PCP and HT are affiliated companies owned by the family of the Kristianto Kandi Saputro. Juliet Kristianto Liu is the spouse of Kris.

The group said that in August 2021, PCP initiated a lawsuit in Indonesia against PMI, QL Mutiara, as well as QL Resources director Chia Seong Fatt in his capacity as a director of PMI, for alleged management negligence and sought compensation amounting to about RM221.87 million.

PCP claimed that the negligence caused PMI to suffer eight years of continuous losses since the commencement of its operations between 2012 and 2020. PCP on its part allegedly suffered losses due to not receiving any distributable dividends from PMI.

PCP is also challenging the accuracy of the losses reported in the annual financial statements of PMI presented by Chia, as the basis of the non-distribution of dividends by PMI.

The minority shareholder also alleged that QL Resources’ two subsidiaries and Chia have not performed in accordance with good corporate governance required under Indonesian law and under the contractual arrangement between PCP and the accused parties regarding PMI’s annual financial statements, as it alleged that the accused parties had failed to disclose the data and information requested by PCP.

In December 2021, PMI, Chia and QL Mutiara obtained an interim injunction order against PCP to restrain PCP from continuing with the Indonesian proceedings.

However, PCP had, in breach of the injunction order and the MJVA, deliberately proceeded and continued with the Indonesian proceedings until around March 2022, claimed QL Resources.

In March 2022, PCP applied to withdraw and annul the lawsuit against PMI, Chia and QL Mutiara.

QL Resources said QLO is now launching the arbitration to seek relief from HT and PCP, and specific performance orders to compel HT and PCP to comply with their obligations and duties under the MJVA. QLO is also seeking damages from the two firms.

Apart from the potential damages to be assessed and costs which may be awarded against HT and PCP, and the corresponding legal costs on the part of QLO, QL Resources said the arbitration is not expected to have any other material financial impact on the company for the financial year ending March 31, 2024. The arbitration is also not expected to have any business and operational impact on the group.

QL Resources’ share price closed up two sen or 0.37% at RM5.37 on Thursday, giving the group a market capitalisation of RM13.07 billion.

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