IGB CORPORATION BERHAD PART A STATEMENT in relation to ...

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FURTHER INFORMATIONAPPENDIX I1. RESPONSIBILITY STATEMENTThis Statement/Circular has been seen and approved by the Board of IGB and they collectively andindividually accept full responsibility for the accuracy of the information given in this Statement/Circularand confirm that after making all reasonable enquiries and to the best of their knowledge and belief,there are no other facts, the omission of which would make any statement herein misleading.2. MATERIAL CONTRACTSSave as disclosed below, there are no material contracts (not being contracts entered into the ordinarycourse of business), which have been entered into by IGB and/or its subsidiaries during the two (2)years immediately preceding the date of this Statement/Circular:(i)(ii)On 7 September 2004, MVC via a special purpose vehicle, Mid Valley Capital Sdn Bhd, a whollyowned subsidiary of Kris, entered into an agreement with United Overseas Bank (Malaysia) Bhd(“UOB”) and OCBC Bank (Malaysia) Berhad (“OCBC”) to issue up to RM400 million Nominal ValueRedeemable Secured Bonds (“Bonds”). The Bonds issued comprises two (2) classes: Class 1consists of 6 series with an issue amount of RM285 million and Class 2 consists of 4 series withan issue amount of RM115 million. The Bonds have maturity dates ranging from 3 to 11 yearsfrom the date of issuance. Proceeds had been utilised by MVC to refinance its existingborrowings. UOB and OCBC are the Principal Adviser and Lead Arrangers respectively, and alsothe primary subscribers to the Bonds; andOn 6 December 2005, Kris entered into a subscription agreement with United Overseas Bank (M)Bhd (being the primary bonds subscriber) and Hwang-DBS Securities Berhad (being the primarywarrants subscriber) in relation to RM200,000,000 nominal value of 7-year bank guaranteedbonds (“BG Bonds”) together with detachable provisional rights to allotment of 110,134,166 5-year warrants (“Warrants”) on a “bought-deal” basis. The coupon rate-to-call of the BG Bondsis 3.40% per annum up to the 5th year from issuance and coupon rate of the 6th & 7th years is5.65% per annum, if the option for 2-year extension is exercised at the 5th year. The BG Bondswere issued on 23 December 2005 and proceeds therefrom were utilised to redeem 2,000,000 outof 2,930,000 5-year redeemable preference shares of RM0.10 each (“RPS”) at RM100.00 per RPSon 30 December 2005. The Warrants will be offered for sale to Kris shareholders on arenounceable basis of one (1) Warrant for every three (3) ordinary shares of RM1.00 each held inKris on a book closure date to be determined and announced in due course.3. MATERIAL LITIGATION, CLAIMS OR ARBITRATIONSave as disclosed below, neither IGB nor any of its subsidiaries have engaged in any material litigation,claims or arbitration, either as plaintiff or defendant as at the date of this Statement/Circular, and IGB isnot aware of any proceedings, pending or threatened against IGB or its subsidiaries, or any facts likelyto give rise to any proceedings which might materially and adversely affect the financial position orbusiness of the IGB Group:(i)On 11 October 1991 (Suit No. S2-22-454-1991), Akitek Tenggara Sdn Bhd (“AT”) commenced anaction for a breach of contract arising from the wrongful termination of services of AT by MVC.On 11 May 1999, the High Court ordered MVC to pay AT the sum of RM7,705,382.00 togetherwith the interests and costs from 1 November 1988.The High Court has granted a stay of execution of the judgement pending the appeal on conditionthat MVC pays RM2 million and provides a bank guarantee for the balance sum to AT.In suit W-02-384-1999, MVC appealed against the decision of the High Court. The appeal washeard on 25 September 2004 and the Court of Appeal held that:(a)the appeal by MVC against the order of the High Court was allowed, and AT was onlyentitled to work done at the date of termination of the contract amounting toRM2,636,373.00 only;Page 16
(b)(c)as RM2,630,000.00 has already been paid to AT, it is only entitled to the balance sum ofRM6,373.00 plus interest from 11 May 1999 until payment is made to AT; andcosts of the proceedings in the High Court and in the Court of Appeal was awarded to MVC.The sum of RM6,373.00 plus interest was paid to AT’s solicitors on 8 October 2004.On 19 October 2004, AT has filed a civil application to the Federal Court of Malaysia seekingleave from the Federal Court to appeal against the Order of the Court of Appeal dated 25September 2004. The Federal Court, on 7 September 2005, granted AT leave to appeal.The solicitors of MVC are of the view that MVC has good prospects of success in the appeal.Nevertheless, as IGB has undertaken with MVC to bear all liabilities or losses of MVC under thislegal suit, the legal suit is not expected to have a material effect on the financial position of MVC.(ii)An action (Suit No. Kuala Lumpur High Court: S6-23-70-04) in defamation for loss of reputationand business was initiated by Shuib bin Hassan (practising under the name of Poliklinik danSurgeri Titiwangsa)(“Plaintiff”) against Cititel Hotel Management Sdn Bhd (“Cititel”) and two of itsemployees, Petrina P.F.Chong and Nor Ashikin binti Othman (collectively called “theDefendants”).The Plaintiff is seeking damages in the sum of RM50,000,000.00 or alternatively for damages tobe assessed by Court.The Writ of Summons for the action was served on Cititel and the two (2) other Defendants on 24December 2004. On 30 December 2004, an Appearance was filed by the Defendants and followedby the filing of Defence of the Defendants on 14 January 2005.The Solicitors of Cititel are of the opinion that Cititel has good prospects of success in defendingthe suit.(iii)On 9 September 2005 (Suit No. D8-22-1327-2005), IGB commenced action against BerjayaGroup Berhad (“Berjaya”) for breach of contract in respect of a sale and purchase agreementdated 26 July 1995 (the “SPA”) where IGB had sold Berjaya all its shares in Wangsa Tegap Sdn.Bhd. (“Wangsa Tegap”). IGB is seeking specific performance in relation to the granting of anoption under the SPA for development rights of a piece of land owned by Wangsa Tegap and, inthe alternative, damages to be assessed.IGB’s writ and statement of claim was served on 20 September 2005 and Berjaya filed and servedits Defence on 11 October 2005. The suit is presently fixed for case management.The solicitors of IGB are of the opinion that IGB has good prospects of success in the action.4. DOCUMENTS AVAILABLE FOR INSPECTIONCopies of the following documents are available for inspection during normal business hours at theRegistered Office of IGB at Penthouse, Menara IGB, No. 1, The Boulevard, Mid Valley City, LingkaranSyed Putra, 59200 Kuala Lumpur from the date of this Statement/Circular up to and including the date ofthe 42 nd AGM:i) Memorandum and Articles of Association of IGB;ii) Audited consolidated financial statements of IGB for the past two (2) financial years ended 31December 2004 and 31 December 2005;iii) Material contracts referred to in Section 2 of this Appendix; andiv) Relevant cause papers in respect of material litigation referred to in Section 3 of this Appendix.Page 17
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