News

1.         COMMENCEMENT OF MATERIAL LITIGATION

QLR wishes to announce that on 9 August 2021, a lawsuit has been initiated against its subsidiaries, PMI and QLM, as well as Chia Seong Fatt (a director of QLR) in his capacity as a director of PMI. The lawsuit was served on PMI on 12 August 2021. Todate, QLM and Chia Seong Fatt have not received service of the lawsuit.

2.         PARTICULARS OF THE LAWSUIT

The lawsuit is a civil action initiated by PT Pipit Citra Perkasa, a minority shareholder of PMI against the Defendants for alleged unlawful action / tort under Article 1365 Indonesian Civil Code. The grounds of complaints by the Plaintiff are as follows:

1. the Plaintiff alleged that the Defendants were negligent in the management of PMI and caused PMI to suffer 8 years of continuous losses as from the commencement of operational activities of PMI since year 2012 to year 2020. This has caused the Plaintiff to suffer losses as a result of not receiving any distribution of dividends from PMI;

2. the Plaintiff challenged the accuracy of the losses reported in the annual financial statements of PMI presented by the 2nd Defendant, as the basis for the non-distribution of dividends by PMI; 

3. the Plaintiff further alleged that the Defendants have not performed in accordance with good corporate governance practice as required under Indonesian law and contractual arrangement between the Plaintiff and 3rd Defendant, in relation to the annual financial statements of PMI by not disclosing the data and information that the Plaintiff has requested and by rejecting the Plaintiff’s request for an audit investigation over the annual financial statements of PMI;

4. the Plaintiff alleged that it also suffered investment losses since it has never received any economic benefit from the business of PMI, despite its contribution to PMI in terms of capital injection, shareholder’s advance, and the management of location permit of PMI since 2004.

The Plaintiff sought, amongst others, the following:

a. declaration that the Defendants have committed an unlawful act or tort;

b. request the Judge to sentence the Defendants to pay material compensation, jointly and severally, as follows:

     -        Payment of the sum of IDR41,518,502,387;

     -        Payment of the sum of USD2,584,314;

     -        Payment of the sum of USD18,000,000.

c. request the Judge to sentence the Defendants to pay immaterial damage compensation jointly and severally in the amount of IDR415,185,023,873;

d. request the Judge to sentence the Defendants to pay late payment penalty in the amount of IDR10,000,000 per day for any late payment of compensation from the Defendants;

e. request the Judge to place a confiscation of 2 (two) plots of land registered in the name of PMI and 2,983,000 shares belonging to QLM in PMI (so that they are not sold, transferred, or transferred in any form);

f. request the Judge that the Defendants bear the costs of the case.

The application is fixed for hearing on 19 August 2021 in Tarakan District Court, North Kalimantan, Indonesia. 

3.         BRIEF BACKGROUND OF THE PARTIES TO THE LAWSUIT

QLM is the joint venture company between QL Oil Sdn Bhd (“QL Oil”), a wholly owned subsidiary of QLR, and Hang Ting Pte. Ltd. (“Hang Ting”) pursuant to the Master Joint Venture Agreement dated 16 August 2006 (“MJVA”) executed between QLO, Hang Ting and the Plaintiff. PMI is the operating plantation company which is 95% held by QLM, whereas the remaining 5% shareholdings in PMI is held by the Plaintiff. QLO has an effective interest of 74.5% in PMI whereas Hang Ting and the Plaintiff collectively have an effective interest of 25.5% in PMI. The Plaintiff and Hang Ting are affiliated companies owned by the family of Kristianto Kandi Saputro.

4.         LEGAL POSITION OF THE COMPANY

QLR has obtained preliminary legal advice from its Indonesian counsels, and is of the view that the lawsuit is frivolous, vexatious, inarticulate, obscure and without any legal merits, and is an abuse of legal and contractual process.

The Company is denying and refutes the basis of the lawsuit and all the Plaintiff’s allegations of liability and claims for damages, and will vigorously challenge and resist the lawsuit.

5.         FINANCIAL IMPACT ON THE COMPANY

The Company does not expect any material losses to arise by reason of the commencement of the lawsuit by the Plaintiff other than legal costs in defending the claim.

The Company is seeking and awaiting further legal advice in respect of this matter and will make the necessary announcement as and when there are further developments in relation thereto from time to time.

This announcement is dated 16 August 2021.