KUALA LUMPUR (June 19): Perak Corp Bhd (KL:PRKCORP), which is 52.9% owned by the Perak State Development Corp, has dismissed allegations that it is losing significant land parcels due to unpaid rent, saying they are "categorically false".

In a bourse filing, the Practice Note 17 (PN17) company stated that when the land confiscation occurred, Perak Corp had already derecognised the assets and liabilities of its wholly owned subsidiary PCB Development Sdn Bhd and PCB Development’s 51%-owned subsidiary Animation Theme Park Sdn Bhd from the consolidated statement of financial position as of Dec 20, 2021.

The derecognition, it explained, occurred because PCB Development underwent creditors' voluntary winding up, during which liquidators assumed control of its business undertakings. As such, the land confiscation has no impact on Perak Corp's financial standing, Perak Corp affirmed.

Perak Corp was responding to The Edge Malaysia weekly's report titled More intriguing issues emerge at Perak Corp published for the week of June 17-23, which stated that the Perak state government had initiated actions in October 2022 to take over six parcels of land owned by PCB Development, due to unpaid quit rent amounting to RM337,177.48.

Documents from the Pejabat Tanah and Galian Negeri Perak, cited by The Edge, also revealed that a Notice 8A for land confiscation was gazetted for these parcels in October 2022, according to the report.

“The article [also] implies that minority shareholders of Perak Corp were adversely affected. However, the derecognition of PCB Development effectively shielded Perak Corp from any financial repercussions, safeguarding the interests of all shareholders of Perak Corp given PCB Development’s liabilities far exceeded its assets and is in an insolvency position,” it said.

"The narrative that PCB Development’s scheme of arrangement was rejected is factually incorrect," it said, adding both Perak Corp’s and PCB Development’s schemes were duly approved by their respective scheme creditors during the adjourned meetings held on April 19, 2021 and sanctioned by the High Court on May 7, 2021.

“This approval has been announced to Bursa Malaysia Securities on May 11, 2022, disclosed in our quarterly reporting, audited statutory financial statements in the annual report, and reiterated in various voluntary clarifications. Despite extensive and repeated disclosures on this matter, it appears that the information has continued to be overlooked,” Perak Corp stressed.

Further, the company highlighted that Mohamed Shafeii Abdul Gaffoor was the chief executive officer of Perak Corp from August 2018 to June 2020, when the company had been declared insolvent, resulting in its fall into a PN17 position on Feb 11, 2020.

"Paradoxically, he later sought to set aside the sanctioned scheme of arrangement of Perak Corp and PCB Development, which aimed to restructure the outstanding financial obligations of these companies," said the company.

“However, on Nov 7, 2023, the High Court of Ipoh ruled that the allegations in support of the originating summons filed by Mohamed Shafeii were not supported by any contemporaneous evidence. Consequently, the court deemed Mohamed Shafeii’s action through the originating summons as frivolous, scandalous, vexatious, and amounted to an abuse of the court’s process.

“This ruling reaffirms that these claims were unfounded, intended to mislead, and create unwarranted suspicion,” the company added.

Shares of Perak Corp closed down one sen or 0.78% at 35 sen on Wednesday, giving the company a market capitalisation of RM35 million.