Annual Report 2012 - IOI Group

NOTES TO THEFINANCIAL STATEMENTS40. CONTINGENT LIABILITIES – UNSECUREDGroupCompany2012RM’0002011RM’0002012RM’0002011RM’000Litigations involving claims for damages andcompensation 6,000 6,000 – –The Directors are of the opinion that the possibility of any outflow in settlement arising from the litigations involving claims fordamages and compensation is remote.Material litigation – subsidiariesThe Directors are of the opinion that the possibility of any outflow in settlement arising from the following litigation is remotebased on legal opinion obtained. Nevertheless, disclosures are made in view of its materiality.Unipamol Malaysia Sdn Bhd and Pamol Plantations Sdn Bhd (subsidiaries of IOI Oleochemical Industries Berhad (“IOI Oleo”))This is a legal suit instituted by the shareholders of Unitangkob (Malaysia) Berhad (“Plaintiffs”) against Unipamol Malaysia Sdn Bhd(“Unipamol”), Pamol Plantations Sdn Bhd (“PPSB”), Unilever Plc and its subsidiary Pamol (Sabah) Ltd in which the Plaintiffs claimedfor inter-alia, special damages of RM43.47 million, general damages of RM136.85 million or such amount as may be assessed by thecourt on the alleged wrongful refusal or failure of the defendants to continue with a Share Sale Agreement and Shareholders’Agreement. Unipamol and PPSB have entered an appearance and filed a Defence to the claim as well as a Counter-claim againstthe Plaintiffs.Unilever Plc and Pamol (Sabah) Ltd had filed an appeal against the decision of the Court delivered on 14 January 2010 dismissingtheir application to strike out the claim against them. On 13 October 2010, the Court of Appeal allowed the Unilever Plc’s appealbut dismissed Pamol (Sabah)’s appeal. The Plaintiffs have since filed an application for leave to appeal to the Federal Court on thedecision of the Court of Appeal in allowing Unilever Plc’s appeal.The High Court has on 3 December 2010 struck off the Plaintiffs’ Writ of Summons and Statement of Claim due to procedural noncompliancesubject to the Plaintiffs’ right to apply for reinstatement. The Plaintiffs’ Solicitors have subsequently filed an application toreinstate the Writ of Summons and Statement of Claim. On 10 March 2011, the High Court dismissed the Plaintiffs’ application forreinstatement and the Plaintiffs have filed an appeal against the said decision to the Court of Appeal and the Court of Appeal hasallowed the Plaintiffs’ appeal on 12 December 2011. The matter has been presently fixed for hearing on 18 and 19 of September 2012.Meanwhile, the Plaintiffs’ application for leave to appeal to the Federal Court (against the decision of the Court of Appeal to strikeoff the 3 rd defendant as a party) has been allowed. The Federal Court has completed the hearing for the said appeal on 29 May2012 and decision is reserved.The relevant subsidiaries have obtained favourable legal opinions on the merits of their respective cases, which existed prior tothem becoming IOI Oleo’s subsidiaries.212IOI CORPORATION BERHADAnnual Report 2012