FGV Audited Financial Statements 2019

215 01 S E C T I O N NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 AUDITED FINANCIAL STATEMENTS 2019 59 CONTINGENT LIABILITIES On 21 September 2017, Delima Oil Products Sdn. Bhd. (“DOP”), an indirect subsidiary of the Company, was sued by a company in China known as Chengdu Azonda International Trading Co., Ltd. (“Azonda”). The Plaintiff claims that they have incurred damages due to the alleged shipment issues in 2016 and 2017 amounting to RM7.0 million as well as loss of future profits approximately RM46.0 million. On 3 November 2017, DOP filed its Statement of Defence and Counterclaim and Azonda filed its Reply to Defence and Defence to Counterclaim on 15 November 2017. The Court had heard part trial the matter on 15 January 2019 and continued another part heard on 4 March 2019 to 6 March 2019. The matter was fixed for decision (after full trial) on 1 August 2019 whereby the High court dismissed the plaintiff claim against DOP and allowed the counter claim made by DOP with costs of RM80,000. On 10 September 2019, the Solicitor informed that the Plaintiff Solicitor did not serve any notice of appeal. The remaining claims are not material to be disclosed in the financial statements and deemed remote by the Directors. 60 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (i) On 2 January 2019, Dato’ Mohd Hairul Abdul Hamid was appointed as Chief Financial Officer of FGV. (ii) On 3 January 2019, in relation to the Termination of the Joint Venture Agreement between FGV Myanmar (L) Pte. Ltd., a wholly owned subsidiary of the Company and Pho La Min Trading Company Limited in 12 May 2017, the Board of Directors of the Company announced that FGV Pho La Min Co., Ltd. (“FGV PLM”), the indirect joint venture of the Company has been terminated. This was following the notification received from The Government of the Republic of the Union of Myanmar, Ministry of Investment and Foreign Economic Relations, Directorate of Investment and Company Administration. As a result, FGV PLM had ceased to be a joint venture company of the Group. The termination will not have material financial impact to the Group for the financial year ended 31 December 2019. (iii) On 23 January 2019, Dato’ Haris Fadzilah Hassan was appointed as a new Chief Executive Officer and his appointment has been concurred by the Minister of Finance (Incorporated). With the appointment of Dato’ Haris Fadzilah Hassan as Chief Executive Officer, Datuk Wira Azhar Abdul Hamid resigned as the Interim Chief Executive Officer. (iv) On 12 February 2019, all Defendants to the suit filed by the Company on 23 November 2018 against its former members of the Board of Directors and former employees on the acquisition of APL (“Company suit”) had filed their respective Defences except for one, who is directed by the High Court to file his Defence on or before 4 March 2019. On 11 February 2019, certain Defendants to the Company suit had filed a counterclaim (“the Counterclaim”) against the Company and the current members of the Board of Directors of the Company (“Counterclaim Defendants”). TheCounterclaimseeks reliefs, jointly and severally, against theCompany and theCounterclaimDefendants for declaration that the Company and the Counterclaim Defendants were liable for the loss of RM514 million (in the Company’s suit) and for any damages, general damages and interest at 5% per annum to be indemnified by the Company and Counterclaim Defendants. On 8 November 2019, the Counterclaim Defendants filed an application to strike out the Counterclaim. The High Court after hearing both parties, had struck out the Counterclaim and dismissed the 10th to 14th Defendants’ claim with costs. On 13 January 2020, the Solicitors of 8th Defendant updated the Court that they had filed an application to amend their Defence. In light of the Government’s movement control order, the case management and hearing which was set on 19 March 2020 has been vacated. The Court has fixed the next case management on 16 April 2020 to set new date for hearing of Stay of Proceedings application.