1. INTRODUCTION

The Board of Directors (“Board”) of SEB wishes to announce that the Company had on 8 November 2024, received a sealed Writ of Summons and Statement of Claims filed by CN ELECO against MIE and SEB (“Defense and Counterclaim” or “Counterclaim”) under the original suit No. BA-22C-36-10/2024 filed by MIE Industrial Sdn. Bhd. (“MIE”) against CN ELECO (“Main Suit”), initiated in the High Court of Malaya at Shah Alam.

2. DETAILS OF THE MAIN SUIT, WRIT OF SUMMONS AND STATEMENT OF CLAIM

Under the Counterclaim, CN ELECO claims the following from SEB and MIE, jointly and severally:

1. Outstanding sum of RM10,650,822.17 under progressive claims;
2. Outstanding sum of RM12,201,382.07 under Variation Orders;
3. First moiety of retention sums totaling RM2,085,877.58;
4. A declaration that neither MIE nor SEB is entitled to impose back charges on CN ELECO;
5. Joint and several liability for damages to CN ELECO for conspiracy to injure and/or unlawful interference with CN ELECO’s business, with damages to be assessed by the Court;
6. Joint and several liability for exemplary damages, also to be assessed by the Court;
7. Interest at 5% per annum on the awarded amount from the date of judgment until full settlement; and
8. Costs.

The basis of MIE’s claim under the Main Suit against CN ELECO is that CN ELECO has allegedly breached its contractual obligations under a Letter of Acceptance dated 11 April 2022 (“the LOA”) regarding the “Proposed Big Blue Project at Bandar Enstek Subcontracting of R.C. Structural & Architectural Work” (via PO No.: DLM-CSA-MIE-CNE-SCA-001) awarded by Dutch Lady Milk Industries Berhad (“the Project”), with back charges by MIE amounting to RM21,138,050.46 for alleged breaches.

However, CN ELECO contends there was no breach on its part and alleges that the back charges are unwarranted and an afterthought by MIE. Additionally, CN ELECO has pleaded for a set-off of the amounts should MIE’s claims in the Main Suit be upheld by the Court. CN ELECO has named SEB in the Counterclaim on the following grounds:

1. MIE is SEB’s largest shareholder, holding a total of 55,549,752 shares.
2. SEB allegedly interfered by certifying work after CN ELECO suspended work around June 2023.
3. SEB was involved in assessing the Defendant’s work despite a lack of direct contractual relationship with CN ELECO.
4. Allegations of conspiracy by SEB and MIE to injure CN ELECO’s business.
5. MIE allegedly acted as SEB’s agent in the Sub-contract Agreement dated 5 March 2022.

However, SEB’s position is that these allegations are unsubstantiated and lack documentary evidence, as there is no contractual obligation between SEB and CN ELECO.

A case management date has been set by the High Court on 21 November 2024.

3. FINANCIAL AND OPERATIONAL IMPACTS

Aside from the legal fees and associated costs to challenge the Counterclaim which will be funded entirely from the internally generated funds of the Company, this litigation is not anticipated to have any significant financial or operational impacts on SEB.

4. STEPS TO BE TAKEN

The Company is in the midst of seeking legal advice to resolve and/or defend itself in the legal suit. Further announcement(s) on any material developments will be made as and when appropriate.

This announcement is dated 12 November 2024.