KUALA LUMPUR (Aug 17): VS Industry Bhd said four NEP Holdings (Malaysia) Bhd officials were found guilty of contempt of court on Thursday (Aug 17) for failing to comply with an inspection order in relation to a dispute between the two companies.

VS Industry, along with its executive chairman Datuk Beh Kim Ling, had initiated the legal action in the High Court in January last year, seeking an inspection of NEP's accounting records by an auditor approved by the group and Beh.

The NEP officials found guilty are its directors Lim Chang Huat, Lim Chee Kon and Chow Chun Pooi @ Chow Chan Leong, and general manager Kong Kian Huat, said VS Industry in a bourse filing, adding that they will be sentenced on Aug 24.

VS Industry had in 2016 acquired a 20% stake in NEP, which is known for its ‘Diamond’ brand of water filtration system products, for RM60 million.

VS Industry signed an agreement with Chang Huat and Chee Kon on the rights, duties, liabilities and obligations of the shareholders in relation to the management and operation of NEP and its subsidiaries.

According to VS Industry, NEP had failed to fulfill various obligations, including not holding annual general meetings for the financial years 2021 and 2022, as well as not filing audited accounts for the same periods.

In June 2022, the High Court granted VS Industry and Beh an inspection order. This order required NEP to open its accounting records for inspection by the group's auditor and to provide all accounting records for the auditor to make copies. However, NEP allegedly did not fully comply with this order.

VS Industry and Beh filed another suit last month, seeking an order for NEP to be wound up based on claims of oppression of minority shareholders.

VS Industry’s share price closed unchanged at 93 sen on Thursday, valuing the company at RM3.6 billion.