Khee San sues Maybank Islamic over RM6.55m default payment

KUALA LUMPUR (July 15): Khee San Bhd has filed a writ of summons against Maybank Islamic Bhd over a payment default amounting to RM6.55 million allegedly owed by the former's wholly-owned unit Khee San Food Industries Sdn Bhd (KSFI) to the latter.

The loan default came after a trade facility obtained by KSFI from Maybank Islamic in January 2013, when both Khee San and KSFI were under the control and management of London Biscuits Bhd, the group said in a bourse filing today.

After the liquidation of London Biscuits on Jan 13, Khee San said it had discovered certain irregularities relating to the loans provided by Maybank Islamic, which is now demanding the default payment via a letter dated Nov 8, 2019.

"Upon the investigations conducted by the plaintiffs, the plaintiffs have discovered that approximately a sum of RM2.11 million of the total claim of RM6.55 million claimed by the defendant as due is in fact fictitious.

"The defendant has negligently allowed the drawdown based on fictitious documents from the Bankers' Acceptance facilities and further, these transactions were not supported by any underlying transactions," said the candy maker.

According to Khee San, Maybank Islamic has breached its duty of care by not making reasonable enquiry to ensure that the transactions were bona fide, before allowing KSFI or London Biscuits to instruct the drawdown.

Khee San's claim against Maybank Islamic comprises "damages for negligence, interest, costs and any further relief as the court deems fit and proper".

Shares in Khee San settled one sen or 3.39% lower at 28.5 sen apiece with 1.26 million units done. This gave the counter a market capitalisation of RM32.6 million.