FGV Holdings Bhd (FGV) said that its subsidiary, FGV Bulkers Sdn Bhd (FGVB), is facing a legal suit from South Asian International Distribution Sdn Bhd, which is seeking damages totaling RM90.8 million.

The suit, filed in the High Court of Kuala Lumpur, centers on an alleged breach of a Supply and Delivery Agreement (SDA) for the supply of palm kernel shells (PKS), bringing to light disputes over pricing terms.

The writ of summons, dated November 4 2024, was served to FGVB on November 6.

The plaintiff claims that FGVB did not comply with terms under the SDA, which was signed on February 28, 2023, specifically regarding price adjustments within a designated six-month period.

South Asian International Distribution contends that FGVB unjustly raised the PKS price in violation of Clause 5.1 of the agreement.

It argued that any price adjustment within this timeframe should be deemed null and void.

In its claim, the plaintiff seeks RM4.4 million for direct losses and RM86.4 million for other financial damages, asserting these losses were incurred due to FGVB’s alleged breach.

It is also seeking a formal declaration to invalidate any agreements related to the PKS price hike, as well as interest, legal costs, and other relief the court may find appropriate.

FGVB has 14 days to respond to the suit, with case management set for November 20, 2024.

FGV said that it is currently consulting with legal advisors on the matter and will keep stakeholders informed of any significant developments in the case.

The company does not anticipate any material impact on its financial or operational performance for the fiscal year ending December 31, 2024. –TMR