Local firm claims OCBC’s actions caused it to lose more than RM55 million
Nicholas Chung – February 18, 2020 6:53 PM
SHAH ALAM: The hearing of a civil suit filed by a local firm against Oversea-Chinese Banking Corporation (OCBC) has resumed today, as the company involved in the local trading of rice and commodities seeks more than RM280 million in damages from the Singaporean bank.
Prolink Marketing Sdn Bhd’s managing director Kuganeswaran Chandran took the witness stand over the bank’s alleged dishonesty and negligence in managing the company’s credit facilities.
Replying to questions from lead counsel Jaswinder Singh, Kuganeswaran said OCBC had discontinued two receivable purchase facilities (RPF) while recalling the outstanding amounts. He said the bank also failed to give any reason for the discontinuation.
None of the payments were overdue or past the due date for the settlement, he added.
He was also told that the bank will further recall three other financing facilities totalling RM69 million if the company failed to comply with the demands to settle the two RPFs.
“The company had no choice. The company did not have any other RPFs and if the other trade facilities of RM69 million were also discontinued and recalled, the company would collapse financially,” he told the Shah Alam High Court today.
Kuganewaran said OCBC also prevented Prolink from obtaining facilities from other banks as it failed to issue a redemption statement to the company although it had paid the RM30 million.
This, he said, led to financial difficulties for the company due to tight cash flow, disabling the company from supplying goods which made them lose business.
He said the company lost more than RM55 million for failing to fulfil contracts due to the discontinuation of facilities.
“The company was clearly in breach of the agreement. There is no legal recourse to recover. The loss is final,” he said when asked about the possibility of recovery from the losses.
t claimed that OCBC had breached the terms and conditions to receivable purchase facilities and even changed the stipulations without the agreement of the company.
The suit was filed in January 2019 and the matter was first heard in the Shah Alam High Court on Jan 23 this year. The trial resumes tomorrow.