Singapore-listed offshore services provider PACC Offshore Services Holdings (POSH) is seeking legal advice to defend a claim over property purchase.
In January, POSH entered a sale and purchase agreement (SPA) with Singapore-based Kensteel Engineering for the purchase of property. POSH paid a deposit of SGD3.8 million (USD2.68 million) to Kensteel Engineering, while the engineering company sought approval from state-owned developer Jurong Town Corporation (JTC) over the transfer of the property ownership.
However, the application was rejected by JTC and POSH subsequently sought refund of the deposit paid under the SPA. The refund was turned down by Kensteel Engineering and claimed for, among others, a declaration that it is entitled to forfeit the deposit, including goods and services tax.
Moreover, Kensteel Engineering has also issued claim for damages of approximately SGD3.3 million, which it alleged it suffered as a result of the sale of the property not having been completed. Therefore, the engineering company is claiming for a total sum of SGD7.1 million, comprising SGD3.8 million in the deposit and claims for damages at SGD3.3 million.
POSH stated in its filing to the Singapore Exchange (SGX) that the total claims amount nearly represents 9.4% of the company’s audited net profit after tax for the financial year ended 31 December 2014 and less than 0.1% of the POSH’s audited net tangible assets as at 31 December 2014. Therefore, POSH intends to defend against the claim and will update the legal proceedings in the SGX as and when the company deems appropriate.