KUB Malaysia Berhad Annual Report 2021

35. COMMITMENTS, CONTINGENT LIABILITIES AND MATERIAL LITIGATION (cont’d) (b) Contingent Liabilities On 19 November 2018, a subsidiary, KUB Telekomunikasi Sdn Bhd (‘KUBTel’) received a letter of demand from a sub-contractor claiming additional costs incurred, payment on outstanding invoices, and a retention sum amounting to RM3,595,000. This demand was due to an early termination of its services to complete an automatic fare collection system project. On 29 August 2019, the sub-contractor has revised their claims to RM2,883,000. KUBTel has denied all the disputed claims and similarly seeks to set-off and/or counterclaim RM3,306,000 being the costs incurred by KUBTel to complete the works which the sub-contractor had failed to complete and other related charges. KUBTel has made an assessment and based on the legal advice in respect of this matter, the Group believes that it has good grounds to defend and contest against the claim. (c) Material Litigation On 28 November 2019, a winding up petition was filed in the High Court at Shah Alam against a subsidiary company, KUB Sepadu Sdn Bhd (‘KUB Sepadu’), a subsidiary, by its minority shareholders, Medan Sepadu Sdn Bhd and Lembaga Amanah Kebajikan Kaum Melanau Sarawak (‘Minority Shareholders’). On 2 December 2019, the Minority Shareholders filed an application for the appointment of interim liquidators for KUB Sepadu. The High Court granted the order for the appointment of interim liquidators on 9 December 2021 (‘Order for IL’). The winding up petition together with the Order for IL was served on KUB Sepadu on 16 December 2019. On 18 December 2019, KUB Agro Holdings Sdn Bhd, the immediate holding company of KUB Sepadu as the Opposing Contributory filed an application to set aside the Order for IL (‘Setting Aside Application’). On 20 December 2019, the High Court granted a stay on the Order for IL pending the disposal of the winding up petition and/or Setting Aside Application. The Court hearing which was initially scheduled on 8 September 2021 has been adjourned by the Court to 22 November 2021. The Group has made and assessment and sought legal advice in respect of this matter. The Group believes that it has good grounds to defend and contest against the case and accordance with MFRS 10, there was no loss of control in KUB Sepadu as the Order for IL has been put aside until the court hearing. 36. RELATED PARTY DISCLOSURES A related party of the Company refers to: (i) a person or a close member of that person’s family who: (a) has control or joint control over the Company; (b) has significant influence over the Company; or (c) is a member of the key management personnel of the Company having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any Director (whether executive or otherwise) of that entity. (ii) a subsidiary or associate of the Company and its subsidiaries; (iii) an entity of which the Company or its subsidiaries are an associate or joint venture to; (iv) an entity, together with the Company are joint ventures of the same third party; (v) an entity controlled or jointly controlled by a person identified in (i); and (vi) an entity of which a person identified in (i)(a) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). 127 ANNUAL REPORT 2021 FINANCIAL STATEMENTS