AIMFLEX Bhd has initiated legal action against Kong Yeng Kein to claim the outstanding payment of RM3.95 million for a large-scale solar (LSS) project in Perak. 

Its wholly-owned subsidiary Aimflex Solutions Sdn Bhd has filed a writ of summons and statement of claim against Kong who stood as a guarantor for payments from Andeli Solar Sdn Bhd.

The Skudai, Johor-based manufacturing test and automation company initiated the lawsuit after a prolonged series of payment disputes regarding a 9.99 MW solar farm project in Manjung, Perak.

The basis of the claim stems from a letter of appointment (LOA) signed on March 1, 2021, where Andeli Solar appointed Aimflex Solutions to carry out engineering procurement, construction, and commissioning (EPCC) work for the project, according to Aimflex’s exchange filing today.

The RM10.9 million contract specified that Aimflex would be paid based on funds Andeli Solar received from Coral Power Sdn Bhd, the project’s main employer, or six months after the project’s commercial operation date, whichever sooner. 

To secure the contract, Kong provided a personal guarantee on Andeli’s behalf, ensuring Aimflex’s payment for the work done.

After completing its work, Aimflex invoiced Andeli Solar in March 2021, with an outstanding balance of RM7.95 million confirmed by an audit at the end of 2021. 

Partial payments from Coral Power totalling RM4 million were disbursed to Andeli Solar and subsequently transferred to Aimflex between January and February, 2022. 

However, the balance of RM3.95 million remained unpaid as of early February 2022. 

It said the sum was due within six months of the project’s operation date on May 29, 2023, putting the final payment deadline at Nov 29, 2023.

Aimflex’s share price closed 0.5 sen lower at 16.5 sen today, valuing the company at RM243 million. — TMR