|Type||Reply to query|
|Reply to Bursa Malaysia's Query Letter - Reference ID||NM-141106-42431|
|Description||TALIWORKS CORPORATION BERHAD ("TCB" or "the Company")
- DEYANG CIVIL SUIT NO. 121 (2014) ["THE CREDITOR SUBROGATION CIVIL SUIT"] AGAINST PURESINO (GUANGHAN) WATER CO., LTD, A SUBSIDIARY OF TALIWORKS ("SUIT")
|Query Letter Contents||We refer to your announcement dated 5 November 2014 in respect of the above
In this connection, kindly furnish Bursa Malaysia Securities Berhad ("Bursa
Securities") with the following additional information for public release:-
1. The details of the default or circumstances leading to the filing of the
2. The interest rate(s) on the amount claimed for.
3. The financial and operational impact of the Suit on Taliworks group.
4. The expected losses, if any, arising from the Suit.
5. The steps taken and proposed to be taken by Taliworks in respect of the
6. The proportion of the claim amount and liquidated damages that will be
borne by Puresino
(Guanhan) Water Co. Ltd.
Please furnish Bursa Securities with your reply within one (1) market day from
the date hereof.
TAN YEW ENG
Vice President, Issuers
c.c.General Manager & Head Market Surveillance Department, Market Oversight
Division,Securities Commission (via fax)
We refer to Bursa Malaysia Securities Berhad's letter dated 6 November 2014 (Ref No. NM-141106-42431) with regards to the Company's announcement dated 5 November 2014. We are pleased to furnish the following additional information in relation to the above matter for public release:
(i) The details of the default or circumstances leading to filing of the Civil Suit against Puresino Guanghan.
Puresino Guanghan is a 70% owned subsidiary of Taliworks ( Sichuan) Limited which in turn is a 80% owned subsidiary of Taliworks. The 2nd defendant is Puresino Guanghan's 30% shareholder.
Pursuant to the Company's announcement on 28 March 2013, The Sichuan High Court in its civil judgment dated 26 January 2013 had overruled The Sichuan Deyang Intermediate People's Court Civil Judgment (2010) No.61 by dismissing the Plaintiff's claim exercised through its subrogation rights against Puresino Guanghan and the 2nd defendant. The reason given in the judgment is that the Plaintiff's debtor, Watson Environmental, did not comply with the Beijing Arbitration Award No.340 (2011) which requires Watson Environmental to issue equipment invoices totaling RMB11,810,000 to Puresino Guanghan and that forms a condition precedent to the Plaintiff's subrogation right tosue as a creditor.
Watson Environmental had on 28 May 2014 submitted equipment tax invoices with total amount of RMB11,810,000 to Puresino Guanghan. The Plaintiff in this new suit is claiming that the condition precedent has been satisfied and is seeking enforcement of its subrogation right with the Deyang Intermediate People's Cour
(ii) The interest rate(s) on the amount claimed for.
The interest rate on the amount claimed (RMB4,296,047 ) is 0.05% (daily basis) for 6 years period.
(iii)The financial and operational impact of the Suit on Taliworks group
As this Suit is at the preliminary stage, the Board is not in a position to determine the outcome of the Suit. In any event, the Suit is not expected to have any material financial and operational impact on Taliworks group for the current financial year.
(iv)The expected losses, if any, arising from the Suit
In the event the Plaintiff is successful in its claim, Puresino Guanghan and the 2nd defendant shall jointly pay to the Plaintiff an outstanding amount of RMB4.296047 million and liquidated damages of RMB4.704171 million. The Company is expected to incur other incidental expenses such as solicitor fees and court fees to defend the Suit which cannot be determined at this stage as the liability has not been established and the proceeding has not yet been concluded.
(v)The steps taken and proposal to be taken by Taliworks in respect of the Suit.
The Company will engage solicitors on its behalf to contest the said Suit.
(vi)The proportion of the claim amount and liquidated damages that will be borne by Puresino Guanghan
Although the Suit is for Puresino Guanghan and the 2nd defendant to jointly fulfill the obligation of settling the claims and to pay the liquidated damages, the portions to be borne by Puresino Guanghan cannot be ascertained at this juncture until they are decided by the court later.
The Company will make further announcements from time to time.
This announcement is dated 10 November 2014.