Koh Brothers shares continue tumble over significant exposure from major legal disputes
The total amount in potential liabilities comes to a fifth of Koh Eco’s market capitalisation
[SINGAPORE] Shares of Koh Brothers Eco Engineering (Koh Eco) fell further on Wednesday (Aug 19), a day after it disclosed three major legal disputes which potentially expose it to nearly S$57.6 million in liabilities.
The counter fell almost 6 per cent to S$0.097 at 10.56 am, after dropping almost 10 per cent on Tuesday. By 11.23 am, the counter was at S$0.098, still 4.9 per cent down, after almost 5.7 million shares changed hands.
Shares of parent company Koh Brothers Group were down as much as 11.1 per cent or S$0.03, hitting an intra-day low of S$0.24 at 9.40 am. By 11.23 am, the parent counter pared some of its losses to sit at S$0.25, still 7.4 per cent down.
On Tuesday morning, Koh Eco flagged a maximum exposure of S$20.5 million in a joint-venture (JV) dispute, alongside a S$23.3 million consortium arbitration and a subcontractor claim of up to S$13.78 million. The total amount in potential liabilities comes to 20 per cent of its market capitalisation of about S$290 million.
The engineering and construction company said that the Singapore High Court on Aug 6 dismissed applications by its subsidiary, Koh Brothers Building & Civil Engineering Contractor (KBCE), to set aside partial arbitration awards. The JV partner then applied to the tribunal for final payment orders on Aug 7.
KBCE intends to file a counterclaim against the subcontractor and stated that it has not made financial provisions for the suit at this time.
On Tuesday, Koh Eco also held an extraordinary general meeting at which shareholders voted in favour of moving the company to the Singapore Exchange mainboard.
