ATA IMS Bhd has confirmed receiving the notices of termination of its contract manufacturing agreement, agreement for the supply of goods and services and the Framework Agreement for the Supply of Goods (Tooling) from Dyson Operations Pte Ltd and Dyson Manufacturing Sdn Bhd at 5.30pm yesterday (Nov 24).
The contract manufacturing agreement was inked between ATA Industrial (M) Sdn Bhd and Dyson Operations on Oct 15, 2020 while the agreement for the supply of goods and services dated March 1, 2013 was signed between Dyson Manufacturing and ATA Industrial alongside the Framework Agreement for the Supply of Goods (Tooling) on June 17, 2009.
“Dyson Operations and Dyson Manufacturing had issued the notices of termination without cause pursuant to the terms of the respective contracts,” ATA IMS pointed out in a Bursa Malaysia filing.
“The effective date of termination shall be June 1, 2022. Until the termination date, Dyson and ATA shall continue to fully perform their respective obligations under the contracts.”
ATA said it shall include continuing to manufacture and supply products, components and tooling as well as continuing to provide services for and on behalf of Dyson and its affiliates in accordance with the terms of their contracts.
This latest development was not well-received by the stock market as ATA IMS’ stock price succumbed to a limit down at the close of today’s mid-day trading after plunging 30% or 35 sen to 82 sen with 72.4 million shares traded while its market capitalisation edged down below the RM1 bil mark (at RM988 mil).
ATA IMS further noted a Reuters report today in which references have been made to the termination of the contracts by Dyson Operation and Dyson Manufacturing and to an audit of the company’s labour practices.
“The company confirms that prior to the receipt of the notices of termination, the company had been in discussions with Dyson regarding the findings of the audit,” noted ATA IMS.
“The company further notes that it had taken immediate steps upon being notified of the summary of the audit to engage Dyson in discussions and to engage professional advisers to assist the company to review, verify and validate the findings of the audit.” – Nov 25, 2021
