Aspen Group 1F3 0.00% has announced that it has initiated legal proceedings against Tialoc Malaysia on Dec 27, after the company&rsquo s indirect subsidiary Aspen Glove received a writ of summons for an alleged outstanding sum of RM78.1 million ($22.4 million) plus financing charges from Tialoc in August.

 

On Oct 16, Aspen issued a notice of demand to Tialoc to unequivocally deny its claims. Claiming that the suit was a case of abuse of process, Aspen demanded that Tialoc withdraw the suit on the grounds that it is &ldquo wholly unjust&rdquo and &ldquo highly defamatory&rdquo .

 

Tialoc had not withdrawn the suit when Aspen filed its counterclaim with the High Court of Malaya in Penang, Malaysia. Aspen is seeking a declaration that the suit by Tialoc is a &ldquo collateral abuse of court process&rdquo , an order that Tialoc pay the company the sum of RM41.4 million for losses caused by the suit filed by Tialoc, as well as general damages to be assessed.

Aspen is also seeking aggravated and exemplary damages to be assessed and the repayment of legal costs it has incurred in defending the suit filed by Tialoc. 

 

The company will make further announcements when there are updates to the proceedings.

 

on Wednesday (Aug 30) said that its indirect subsidiary Aspen Glove received a writ of summons endorsed with a statement of claim filed by contractor Tialoc Malaysia in the Penang High Court.

 

The writ &ndash received on Aug 28 &ndash named Aspen Group, Aspen Glove&rsquo s directors, Aspen Vision All and KHTP Assets as co-defendants, the Catalist-listed Malaysian property developer said.

 

Tialoc has claimed that Aspen Gloves owes it RM78.1 million (S$22.7 million) in outstanding sums plus financing charges. It also alleged that the co-defendants are liable for fraudulent trading and the alleged debts owed by Aspen Gloves.

 

It is seeking an order that the co-defendants, together with Aspen Glove on a joint and several basis, pay the alleged outstanding sum without any limitation of liability.

 

Aspen Group said that it &ldquo vehemently denies&rdquo any allegation of fraudulent trading and is seeking legal advice from its solicitors with a view to &ldquo vigorously resist and/or defend the suit&rdquo .

 

On Jul 28, Aspen Glove received an adjudication decision that required it to pay a separate RM84.4 million claim by Tialoc Malaysia.

 

In response, the subsidiary has filed applications to stay and set aside the legal decision, the group said in its update on legal proceedings.

 

It does not expect the lawsuit to have any material financial impact on the group, pending the legal proceedings&rsquo outcome.

 

Aspen Glove, the subsidiary of Aspen Group, has submitted a petition to the High Court of Penang to wind up its business on July 14 as it is unable to pay its debts.

 

The news comes after Aspen Glove announced that it was unsuccessful in its proposed disposal of its land and factory at Seksyen 11, Bandar Lunas, Daerah Kulim, Negeri Kedah in Malaysia in April. The land and building were proposed to be sold for a consideration of RMB200.0 million ($61.2 million) in December 2022.

 

&ldquo Given Aspen Glove&rsquo s unsuccessful attempts to dispose of its interest in the lease land and factory buildings&hellip mounting legal claims and suits faced by Aspen Glove and the current financial position of Aspen Glove, the directors and shareholders of Aspen Glove&hellip accordingly resolved that Aspen Glove is unable to pay its debts based on actual and/or contingent liabilities and is cash flow insolvent,&rdquo says the company in its July 16 statement.

 

It adds that the petition to wind up the business is in the &ldquo best interests&rdquo of Aspen Glove and its creditors as it &ldquo ensures an orderly wind-down of the affairs of Aspen Glove under the control of a court-appointed liquidator and is the most time-efficient and cost-effective manner to liquidate Aspen Glove&rdquo .

 

On a pro forma basis, had the winding up of the company been effected on Jan 1, 2021, Aspen Glove&rsquo s loss per share would have been 16.62 sen. After winding up, the company&rsquo s loss per share would&rsquo ve stood at 13.63 sen for the FY2022 ended June 30, 2022.

 

The group first established Aspen Glove during the pandemic in August 2020 to diversify its existing scope of business.

 

&ldquo The medical gloves market is expected to grow at a compound annual growth rate of over 15% during the period 2019&ndash 2025,&rdquo the group wrote in its filing dated Aug 12, 2020.

 

In June 2022, however, the group announced that Aspen Glove would be &ldquo significantly&rdquo scaling down its operations due to the &ldquo increasing headwinds for the medical glove market&rdquo among other factors.