CIMB serves PLUS with arbitration notice
Bank claims highway firm breached some terms in Touch ‘n Go deal
PETALING JAYA: CIMB Group Holdings Bhd and its unit have initiated an arbitration proceeding against highway concessionaire PLUS Malaysia Bhd for breaching some of the terms of their joint-venture agreement (JVA) in relation to Touch ‘n Go Sdn Bhd (TNGSB).
In a filing with Bursa Malaysia, the second-largest banking group in Malaysia said the company and its wholly owned subsidiary CIMB SI 1 Sdn Bhd had on Monday filed and served a notice of arbitration on PLUS due to disagreements arising from PLUS launching its own radio frequency identification (RFID) system.
CIMB, CIMB S1 1 and PLUS are parties to a JVA dated May 12, 1998, in relation to TNGSB.
CIMB group is the biggest shareholder in TNGSB, with a 52.2% stake in the e-payment service provider. Other shareholders in TNGSB are PLUS and MTD Equity Sdn Bhd.
“The company and CIMB SI 1 are seeking to invoke the arbitration agreement contained in the JVA in relation to disputes that have arisen with PLUS in connection with and/or under the joint venture agreement,” CIMB said.
“The claim by the company and CIMB SI 1 is that, amongst others, PLUS has breached the obligations it owed to the company and CIMB SI 1 under the JVA by commencing and launching its own PLUS radio frequency identification (RFID) system,” it explained.
CIMB said the group was seeking an injunction to restrain PLUS from engaging in further business of the PLUS RFID system together with damages, interests and costs.
Both CIMB and PLUS have a common shareholder in Khazanah Nasional Bhd.
The sovereign wealth fund is the largest shareholder in CIMB, with a stake of 27.5% in the lender. It is also the largest shareholder in PLUS, with a 51% stake, while the Employees Provident Fund owns the remaining 49% stake in the company.
The PLUS RFID system was supposed to kick off at three locations in the northern region on Dec 15 with the pilot programme launched at the toll plazas at the Penang Bridge, the Butterworth-Kulim Expressway and in Jitra, Kedah, according to reports.