Jaks temporarily halts claim of bank guarantee by Star Media

PETALING JAYA: The High Court has granted an interim stay restraining Star Media Group Bhd from claiming a RM50 million bank guarantee, following an injunction filed by Jaks Resources Bhd’s (JRB) sub-subsidiary Jaks Island Circle Sdn Bhd (JIC).
JRB told the stock exchange the interim stay granted following a case management held earlier today would last until the inter-parte injunction applications scheduled for hearing on March 7, 2018.
The group said in a statement that it maintained its earlier view that the call on the bank guarantee by Star Media on Feb 15 2018 is baseless and JIC has valid and sufficient grounds to support.
In August 2011, JIC, acquired land in Section 13, Petaling Jaya, from Star Media for RM135 million. Tower A, an office block of 15-storey building, is one of the components of the Pacific Star project developed on the Land.
As security for the performance of JIC’s obligations under the sale and purchase agreement (SPA) JIC provided inter-alia, an irrevocable and on demand bank guarantee in favour of Star Media for the sum of RM50 million guaranteeing the completion and delivery of vacant possession by the purchaser of Tower A within three years from the vacant possession date or three years from the date of approval of the agreed plans for Tower A, whichever is later.
“Since the execution of the SPA, Star Media had in the course of JIC’s development and execution of Tower A, instructed various changes to be made on Tower A that had prevented JIC from completing Tower A. Hence, JIC is of the view that it should have been given extension of time to complete Tower A. Furthermore, any interest claim by Star Media is not right and invalid as the completion time should have been extended,” the group said.
It added that despite the actions by Star Media that prevented JIC from completing Tower A, development of Tower A has made significant progress with completion progress at 95.6%.
The advanced development progress of Tower A is also reflected in the remaining components within the Pacific Star project, whereby the development has achieved good progress. Pending the decision of High Court on the injunction, the ongoing operations of JAKS and JIC, including the on-site development of Pacific Star project will remain unaffected and will progress on schedule, it said.
JRB's share price was up eight sen to close at RM1.77 with some 5.1 million shares changing hands.