Announcement • Jul 26
TXCD Berhad Provides Update on Litigation Matters with QSE Construction Sdn. Bhd
TXCD Berhad had filed a legal suit against Lee Ping Wei, QSE Construction Sdn. Bhd. and its 2 directors (namely, A. Kassim Bin Hj. Ali and Azinal Abidin Bin Hj. Ali) on the ground that Lee Ping Wei had fraudulently issued a letter dated August 9, 2019 on behalf of TXCD, to undertake all bonds required under a contract dated June 25, 2019 between QSE Construction Sdn. Bhd. and Pengurusan Aset Air Berhad in relation to the proposed development of Langat 2 water treatment plant and water reticulation system in Selangor Darul Ehsan /Federal Territory of Kuala Lumpur. QSE Construction Sdn. Bhd. and its 2 directors are alleged to have dishonestly assisted and conspired with Lee Ping Wei in executing the said letter, thereby causing detrimental damage to TXCD Berhad. QSE Construction Sdn. Bhd. filed a legal suit against TXCD Berhad and Ageson Enterprise Sdn Bhd (in liquidation) for the losses and/or damages allegedly suffered as a result of the failure of TXCD Berhad and Ageson Enterprise Sdn Bhd to comply with the contractual terms of the letter dated August 9, 2019 and the joint venture agreement dated September 19, 2019 between QSE Construction Sdn. Bhd. and Ageson Enterprise Sdn Bhd, claiming, the following reliefs: (i) that TXCD Berhad and/or Ageson Enterprise Sdn Bhd pays QSE Construction Sdn. Bhd. the sum of MYR 3,315,174.73, being losses suffered by QSE Construction Sdn. Bhd. due to the breaches of TXCD Berhad and Ageson Enterprise Sdn Bhd for the Works or alternatively, any other sums in which the court deems fit; (ii) interest on the sum of MYR 3,315,174.73 at the rate of 5% per annum from the date of termination of TXCD Berhad and Ageson Enterprise Sdn Bhd under the letter and the joint venture agreement until the date of full realisation; (iii) costs; and (iv) such further and/or other reliefs as deemed fit and proper by the court. On June 30, 2026, the High Court delivered its orders for both suits. On July 7, 2026, TXCD Berhad, through its solicitors, filed appeals to the Court of Appeal in respect of both suits, being of the view that there are good chance of success in the appeals. On July 8, 2026, TXCD Berhad received a statutory notice issued pursuant to Sections 465(1)(e) and 466(1)(a) of the Companies Act 2016 together with the High Court Orders, demand payment of the judgment sum of MYR 3,412,407.80 (calculated as at July 8, 2026) pursuant to the High Court Orders. The said judgment sum is required to be settled within 21 days from the date of receipt of the Statutory Notice. On July 16, 2026, TXCD Berhad, through its solicitors, initiated negotiations with QSE Construction Sdn. Bhd.’s solicitors, with a view to reaching an amicable settlement concerning both suits. On July 24, 2026, both QSE Construction Sdn. Bhd. and TXCD Berhad had agreed on the following (i) TXCD Berhad to pay QSE Construction Sdn. Bhd. the sum of MYR 2,564,755.45 (being 75% of the judgment sum calculated as at July 23, 2026) immediately or latest by the end of business day on July 24, 2026; (ii) the remaining sum of MYR 854,918.48 (being the 25% balance of the judgment sum calculated as at July 23, 2026) shall be deposited to QSE Construction Sdn. Bhd.’s solicitors, as stakeholder, to be held on trust under an interest-bearing account, pending the disposal of the Appeals at the Court of Appeal; and (iii) the sum of MYR 854,918.48 (including the accrued interest) shall be released to QSE Construction Sdn. Bhd. within 3 working days from the date of judgment from the Court of Appeal in the event TXCD Berhad is unsuccessful in the Appeals. Upon execution of the items above, QSE Construction Sdn. Bhd. shall withdraw the Statutory Notice and not to commence and/or continue with any execution proceedings (based on the High Court Orders), pending the disposal of the Appeals. The Company wishes to also inform that a substantial shareholder of the Company has undertaken to bear the full amount of any liability that may arise in the event the Appeals are ultimately determined against the Company as well as provided his financial support for the entire MYR 3,419,673.93 without any further liability to TXCD Berhad. Arising from the above, the Company is of the opinion that the High Court Orders as well as the outcome of both suits will not have a material impact to the financial position of TXCD Berhad.
