FGV Annual Report 2012

114 Felda Global Ventures Holdings Berhad 51 CONTINGENT LIABILITIES (continued) (a) An associate of the Group, Felda Holdings Bhd, has the following contingent liabilities, of which the Group is not jointly or severally liable (continued): (v) On 20 September 2011, FPISB and FELDA were sued by 550 settlers of Gugusan Bera for alleged fraud and manipulation of the extraction rate of palm oil. The plaintiffs are claiming for a share from the sale of kernel, burn ash and sludge oil which was derived from their FFB consignments sold to FPISB’s mills. The claim amounted to RM19.2 million for year 2008 only. FPISB has filed Memorandum of Appearance in High Court on 15 November, a SOD on 3 January 2012 and have also filed an application to Strike-Out Ground on Plaintiffs’claims on 25 January 2012. The Court had on 19 April 2012 allowed order in terms for application by FELDA and FPISB to strike out 20 Plaintiffs with cost on the cause. The Court now fixed the matter for case management on 29 April 2013 for fixing the trial dates and marking of documents. The trial dates will be fixed on the said coming case management. (vi) On 10 May 2012, FPISB and FELDA were sued by 770 settlers of Rancangan Felda Chini 1 to 5 and Rancangan Felda Chini Timur 1 to 3 in Pahang for alleged fraud and manipulation of the extraction rate of palm oil. The claim amounted to RM24.8 million for year 2008 only. FPISB has file Memorandum of Appearance in High Court on 16 May 2012. The case is fixed for first Case Management on 21 May 2012 and SOD on 18 June 2012. The Court fixed a new case management date on 11 December 2012 for parties to file the Bundle of Pleadings, Bundle of Documents, Agreed Facts and Issues to be Tried and Summary of Case. The Court has fixed the matter for Trial on 11 to 13 March 2013, which has been adjourned to 10 to 13 September 2013. (vii) On 5 June 2012, FPISB and FELDA were sued by 956 settlers of Rancangan Felda Keratong 1 to 10 for alleged fraud and manipulation of the extraction rate of palm oil. The claim amounted to RM30.9 million, for year 2008 alone. FPISB has filed Memorandum of Appearance in High Court on 26 June 2012. Defence was filed on 17 July 2012. The Kuantan High Court had vacated the trial dates for this matter which was fixed on 9 to 10 April 2013. This matter was however called for mention on 9 April 2013. The High Court directed that all parties to attend a mediation session on 16 May 2013 before a Judge of the Session Court. In any event, the High Court fixed new dates for trial of this matter on 7 to 11 October 2013. (viii) On 25 January 2013, FPISB and FELDA were sued by 351 settlers of Rancangan Felda Mempaga for alleged fraud and manipulation of the extraction of palm oil. The High Court of Temerloh has fixed the matter for mention on 5 March 2013 to enable the Defendants to enter appearance and to file their Defence. The Court now fixed the matter for case management on 29 April 2013. (ix) On 13 December 2011, Felda Prodata Systems Sdn Bhd (“Felda Prodata”) had appointed Lunas Technology Sdn Bhd (“Lunas”) to develop, supply, install and commission a new estate management system for oil palm plantations called the RML2 System (“the Project”). Subsequently, on 4 April 2012, the parties entered into a Sales and Purchase Contract for an estate management system for oil palm plantation (RML2). On 7 January 2013, LKKP Corporation Sdn. Bhd., an entity claiming to own the software sold by Lunas to Felda Prodata under the Project, served on Felda Prodata a court summons, demanding among other things, that Felda Prodata cease to market or represent that the software belongs to Felda Prodata, general and exemplary damages and the return of all data and information related to the software. Lunas has also been named as co-Defendant in the same suit. This matter has gone for several case managements in the Kuala Lumpur High Court. The Registrar has now fixed the next case management date on 6 June 2013 before the Judge for further directions. Based on available information and on legal advices received, the directors of Felda Holdings Bhd are of the view that there is a reasonable chance of defending all the above claims and therefore, no provision has been made in the financial statements of Felda Holdings Bhd. As a result, no adjustment has been recorded to the share of associates results in the Group’s profit and loss. (b) An associate of the Group, Tradewinds (M) Berhad, has several contingent liabilities, of which the Group is not jointly or severally liable. Arising from the disposal of Tradewinds (M) Berhad as disclosed in Note 53, the Group has no further financial exposure to these contingencies. Notes to the Financial Statements for the financial year ended 31 December 2012