KUALA LUMPUR: Sabah Development Bank is suing Ho Hup Construction Bhd and its 75 per cent owned subsidiary, Ho Hup Ventures (KK) Sdn Bhd (HHVKK), for a loan provided by the bank to one of its subsidiaries.
Ho Hup is being sued in its capacity as corporate guarantor of a RM46.8 million loan given by the bank to Golden Wave Sdn Bhd in 2018.
Golden Wave, is an indirect 52.5 per cent owned subsidiary of Ho Hup.
According to a filing with Bursa Malaysia Securities, HHVKK is being sued by SDB in its role as a shareholder of Golden Wave.
SDB is suing Ho Hup and its subsidiary for RM46.84 million, with a 5 per cent annual interest from Nov 1, 2023 until the date of the judgement.
The company said it is seeking legal advice to resist the suit.
"Ho Hup is in the negotiation with the SDP to resolve these matters."Further announcements will be made as and when there is material development on the above matter," it said.
Ho Hup said it is currently too soon to assess the financial and operational impact on the defendants, as it will depend on the outcome of the lawsuit.
It last traded at 15 sen a share, giving it a market capitalisation of RM77 million.
Sabah Development Bank has been in the news in recent months after it revealed that it had accumulated about RM5 billion bad loans, or non-performing loans (NPL) and would announce an unprecedented loss for the financial year 2023 to 2024.
Sabah's Ministry of Finance had said that the RM5.0 billion NPLs are recoverable as they are mainly secured against land-based assets and under active recovery action.