TRC’s man­age­ment ‘mis­un­der­stood’ ter­mi­na­tion of con­tract

The Sun (Malaysia) - - SUNBIZ -

PE­TAL­ING JAYA: TRC Syn­ergy yes­ter­day ex­plained that its an­nounce­ment of a con­tract ter­mi­na­tion by MRT2 Line project de­liv­ery part­ner MMC Ga­muda KVMRT Sdn Bhd came seven months late, be­cause of its man­age­ment’s “mis­un­der­stand­ing”.

TRC only an­nounced the ter­mi­na­tion of its RM74.4 mil­lion con­tract which was done on May 20, on Nov 28.

In a fil­ing with the stock ex­change yes­ter­day, the com­pany said man­age­ment had thought the ter­mi­na­tion was due to a de­fault in con­tract by TRC. It later found that it was a pre­rog­a­tive of Mass Rapid Tran­sit Cor­po­ra­tion Sdn Bhd, the MRT 2 Line owner, to do so and that it would also be en­ti­tled to com­pen­sa­tion.

Man­age­ment had also opined that the con­tract value of RM74 mil­lion for the job was not too sig­nif­i­cant when com­pared to its to­tal con­tract or­der book of RM2.6 bil­lion and would not have a ma­te­rial im­pact on the earn­ings per share and net as­set value of the com­pany.

How­ever, the com­pany’s board of direc­tors in its meet­ing on Nov 28, agreed to an­nounce the ter­mi­na­tion af­ter due de­lib­er­a­tion and con­sid­er­a­tion.

TRC has ini­ti­ated a se­ries of ne­go­ti­a­tions and dis­cus­sions with MMC Ga­muda to as­cer­tain the quan­tum of dam­ages and cost in­curred and other con­se­quences to the ter­mi­na­tion.

Due dili­gence ex­er­cise had also been un­der­taken by MMC Ga­muda.

TRC Syn­ergy shares dropped 2 sen or 4.82% to close at 39.5 sen yes­ter­day.

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