PESTECH International Bhd (Pestech) is challenging the validity of the contract termination related to the Automated People Mover (APM) project at KL International Airport.

Valued at approximately RM742.95 million, the termination notice, issued by Malaysia Airports Holdings Bhd (MAHB) unit, Malaysia Airports (Sepang) Sdn Bhd (MASSB), alleged non-performance and contract breaches by Pestech Technology Sdn Bhd (PTech), a Pestech subsidiary.

However, Pestech, after consulting independent legal advice, has taken a strong stand, asserting that the termination lacks alignment with the contractual terms, rendering it misconceived.

“Upon seeking independent legal advice, PESTECH takes the position that the termination is misconceived and invalid,“it told the bourse today.

While Pestech disputes the termination’s validity, the company is also expressing its eagerness to achieve a harmonious resolution with MASSB.

“Pestech firmly disputes the termination as contemplated in the termination notice and will enforce its legal rights if necessary but prefers to seek an amicable resolution with MASSB,“ it said.

In response, Pestech has formally communicated its stance to MASSB through a letter dated August 18, 2023, in which the company detailed its perspective on the termination’s legal foundation.

In a parallel development, Pestech has revealed that the termination of the project is poised to exert adverse effects on the group’s revenue and profit for the financial year concluding on June 30, 2024. – TMR