ASM countersues Econpile for RM346 mil

PROPERTY developer ASM Development (KL) Sdn Bhd, a wholly-owned subsidiary of Maju Holdings Sdn Bhd, has countersued Econpile Sdn Bhd, a subsidiary of Econpile Holdings Bhd, for almost RM346 mil.

In a statement on Dec 23, ASM said its action was prompted by Econpile’s failure to carry out work at its Maju Kuala Lumpur project, in response to a suit filed by the construction contractor in March.

Maju KL is a township development with a gross development value (GDV) estimated at RM2.5 bil. According to earlier reports, the development has been extended by two years from its original plan of 2019.

The project in Sungai Besi, KL, comprises seven towers with 4,200 apartments. It is Maju’s biggest project to date.

ASM CEO Mohd Farid Datuk Nawawi said in the report that the lawsuit was made after Econpile failed to carry out piling works for the project worth RM280 mil and declared self-determination in early March.

ASM listed 13 claims for damages and costs following Econpile’s failure to complete the project.

The countersuit includes ASM’s claims of RM33.8 mil for rectification costs as “Econpile’s delay in completion of works and the undertaken works were defective”, causing the real estate developer to take over works left by Econpile.

ASM said it is also carrying out the rectification works for the construction of seven blocks of luxury apartments that are part of the Maju KL development.

Due to this, the developer is unable to deliver vacant possession of 1,403 units to the purchasers under the sale and purchase agreement with total claims of up to RM98 mil.

The claims also include operating costs incurred due to the “delay and extension of Econpile’s abandoned work” since March 1.

ASM alleged it was forced to employ a new contractor to complete the works after a Certificate of Non-Completion was issued to Econpile by the project architect on April 7, 2018.

In addition, ASM has also demanded payments of 110 units worth nearly RM67 mil from Platinum Rhythm Sdn Bhd, which is owned by directors and shareholders of Econpile, through a block purchase agreement on Aug 25, 2017.

In March, Econpile had sought RM80.1 mil in progress claims from ASM for Maju KL, of which 80% of the work had been allegedly completed.

The piling and foundation specialist issued a Notice of Determination to ASM for foundation and substructure works in Maju KL, on the basis of the developer’s interference with or obstruction of the issuance of Interim Certificates in respect of Econpile’s progress claims amounting to RM80.1 mil.

The contractor added that the developer had failed to issue the relevant Interim Certificates within 30 days from the receipt of its progress claims and to make payment within the period of Honouring Certificates.

Subscribe and get top news delivered to your Inbox everyday for FREE