Malaysian retail group Parkson Holdings Bhd’s Cambodian unit has been ordered to pay $144.50 million in damages to its lessor Hassan (Cambodia) Development Co Ltd (HCDC), Parkson Holdings said in a statement filed on behalf of Parkson Retail Asia Ltd (PRA) to Bursa Malaysia on Monday.
The unit, Parkson (Cambodia) Co Ltd (PCCO), is wholly owned by PRA, which is a 67.96 per cent owned subsidiary of Parkson Holdings and is listed on the Singapore exchange.
PCCO must additionally forfeit its security deposit and advance payments amounting to $4.49 million, according to the Phnom Penh Municipal Court’s April 22 verdict on the lawsuit that HCDC initiated against the unit.
The statement said: “PCCO is currently seeking advice from its Cambodian lawyers whether to petition to set aside the judgement, to appeal to the Cambodian Appellate Court or if other forms of recourse are available.
“The board wishes to highlight that the judgement is only applicable against PCCO and does not extend to the company, the company’s other subsidiaries nor its holding companies,” it said.
In November 2018 and October last year, PRA announced that it had issued a notice of arbitration to HCDC under the Singapore International Arbitration Centre (SIAC) over the lease.
PRA announced in its unaudited financial statements – released on August 27, 2019 for the fourth quarter and 12 months ended June 30, 2019 – that the dispute was pending arbitration under the SIAC.
On December 12, 2018, HCDC filed a petition against PCCO at the Phnom Penh Municipal Court seeking damages amounting to $12.44 million.
PCCO tried to challenge the jurisdiction of the Phnom Penh Municipal Court in hearing the case, but failed.
The Monday statement said: “Prior to the judgement, Parkson Cambodia had filed an appeal motion to the Cambodian Appellate Court to transfer the jurisdiction of the Phnom Penh [Municipal] Court to hear Case No 2577 to SIAC Arbitration jurisdiction. The appeal motion is currently pending in the Cambodian Appellate Court.
“The PRA Group’s maximum potential exposure resulting from the judgement will therefore be limited to its capital contribution in Parkson Cambodia which had been fully provided for in the audited financial statements of PRA for the financial year ended June 30, 2017.
“PRA Group had, in its audited financial statements for the financial years ended June 30, 2016, 2017 and 2018, recognised the impairment losses in connection with, inter alia, the full amounts of prepaid rental, rental deposit and property, plant and equipment in respect of the Cambodia Store.
“Accordingly, the judgement, even if not successfully reversed or appealed against by Parkson Cambodia, is not expected to have a material impact on the earnings per share and the net tangible assets per share of the PRA Group for the financial year ending June 30,2020,” PRA said.
The Post could not reach HCDC for comment on Tuesday.