Rich Capital partner wants prompt issuance of performance bond for Batam project
Singapore-listed Rich Capital remains concerned over the Batam project. Above: Oxley’s executive chairman and CEO Ching Chiat Kwong.
Rich Capital said on Thursday (23 May) that it has received a second letter from a joint-venture partner of its 80 percent-owned indirect subsidiary, Oxley Batam, requesting the main contractor of the Batam development project to confirm that it would provide a performance bond by 1 June, reported The Business Times.
The Catalist-listed developer noted that the request runs counter to a previous understanding reached, which was announced on 17 May by Rich Capital.
In its first letter on 13 May, PT Karya Indo Batam (KIB) expressed concerns on the Batam development project, which is being developed by PT Oxley Krya Indo Batam (OKIB) – Oxley Batam and KIB’s equally owned joint venture.
KIB was concerned about a potential conflict of interest in naming Rich-Link Construction (RLC) as the project’s main contractor. This comes as RLC is an associate of Wang Zhen Wen, who is serving as a non-independent non-executive chairman of Rich Capital.
The parties had then agreed for OKIB to accept a performance bond that is issued on Indonesian standard terms, subject to the law of Indonesia as well as the approval of the independent project team of OKIB.
All parties had also agreed for OKIB to release, in goodwill, to RLC a portion of the first progress claim of 8.38 billion rupiah (S$796,000) under the project. Thereafter, RLC has up to two weeks to issue to OKIB the performance bond.
KIB, however, sent a second letter on 22 May which was contrary to the earlier understanding.
Aside from the request for a written confirmation on the provision of performance bond by RLC, KIB also wants the bond to be promptly issued to OKIB and no later than the close of business on 1 June 2019.
Rich Capital revealed that it is assessing the merits, basis and implications of the matters raised by KIB in the second letter. It is also seeking professional legal advice on such matter, it added.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
