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KUALA LUMPUR: Boustead Heavy Industries Corp Bhd (BHIC) says it denies the claims made in a legal suit by the main contractors of the Littoral Combat Ships (LCS) project, which includes among other things, a claim that the 12 letters of award pertaining to the project remain valid.

In an Oct 4 filing with Bursa Malaysia, BHIC said solicitors representing Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodynamics Sdn Bhd (CED) have filed a writ of summons and statement of claim (WSSC) against the company, its wholly-owned subsidiary BHIC Defence Technologies Sdn Bhd (BHICDT), its associate Boustead Naval Shipyard Sdn Bhd (BNS) as well as two nominee directors in CAD and CED.

Both CAD and CED are 51%-owned by BHIC while the remaining 49% stake is owned by Germany's Rheinmetall Group.

The plaintiffs are seeking a total of 17 items under the WSSC, the first of which is a declaration that the 12 letters of award to the plaintiffs from BNS are not void and remain valid and subsisting.

The contracts pertain to, "amongst others, procurement, engineering, integration and supply of combat management system, fire control, communication system, ammunition, radars, torpedos and missiles in relation to the contract for the design, construct, equip, install, commission, integrate, test, trials and delivery of the six Second Generation Patrol Vessels with Littoral Combat Ships capability for the Royal Malaysian Navy".

In addition, the plaintiffs are seeking an order for BNS to pay CAD alleged outstanding amounts of RM880,068, EUR39.87mil, GBP3.78mil and SEK55.94mil, and to pay CED an alleged outstanding amount of RM216.65mil.

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The legal suit also alleged that the two nominee directors of BHIC - Salihin Abang and Vice Admiral (retired) Datuk Syed Zahiruddin Putra Syed Osman - had breached their fiduciary duties, common law and/or statutory duties under the provisions of the Companies Act 2016.

Further, it alleged that the defendants had conspired to injure or defraud the plaintiffs, as well as wrongfully interfered with the actions of the plaintiff's original equipment manufacturers in relation to their contracts.

"BHIC, BHICDT and BNS categorically deny the allegations made by the Plaintiffs. The allegations are baseless, frivolous, vexatious and unjustifiable.

"The Boards of BHIC, BHICDT and BNS believe that the plaintiffs’ claims are untenable and are therefore positive that the companies will prevail in this litigation," said BHIC.

The WSSC was presented on Sept 27, 2022, and served on BHIC and BHICDT on Sept 30, 2022, respectively.

BNS and Salihin were served on Oct 3, 2022, while Syed Zahiruddin was yet to be served as at the date of the announcement.

BHIC added that the case management for the WSSC has been fixed for Oct 11, 2022, and it is currently assessing any financial and operational impact of the WSSC.

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