Southern Acids explains allowing road for Bandar Rimbayu

Southern Acids explains allowing road for Bandar Rimbayu

PETALING JAYA, 24 August: Southern Acids (M) Bhd’s (SAB), ahead of its AGM today, explained its decision to allow an access road to run through an estate under subsidiary Pembinaan Gejati Sdn Bhd, almost a year after minority shareholders raised the issue at the last AGM.

On Aug 28, 2015, SAB said minority shareholders raised queries on the rationale in allowing a 2.2 kilometre part of a 9-kilometre access road to be built by Bandar Rimbayu Sdn Bhd (BRSB) on a 644 acre land in Thangamallay Estates.

SAB in a filing with Bursa Malaysia said, the board, at a board meeting held sometime in 2012, approved the 2.2km part request from BRSB on considerations such as; BRSB bearing the construction and maintenance costs; that it will be aligned with the future necessary two-lane dual carriage-way road of Gejati’s 644 acres grounds intended layout plan; that it be situated along the boundary parallel to the TNB High Tension Cables of the said estate land; and that the road will enhance the connectivity of Thangamallay Estates not only to the Bandar Rimbayu development but also to other major areas through nearby highways.

SAB said besides the consent been given by the board and the construction and maintenance costs to be borne by BRSB, a member of IJM Corp Bhd group, all other terms and conditions are still being negotiated.

The legal ownership of the 2.2km part of a 9km access road belongs to Gejati as the construction is fixed to the 644 acres land. This is reconfirmed via a written legal opinion dated Aug 15, 2016, from the company’s legal adviser Messrs. Lim Kian Leong & Co. The 2.2km part, however, will eventually be surrendered to the local authorities.

On SAB’s long term strategy plan, it said the main objective of the board is to improve the value of the company’s assets over the long term, which naturally translates to a long term growing shareholders’ value.

Currently, SAB wants to strengthen its two existing long-term core businesses, which are palm oil oleochemical products manufacturing and exporting; as well as palm oil milling and oil palm estate operating (in the province of Riau, Indonesia), which are facing changing environmental challenges.

“The board is of the view that it is not timely for the company to venture into property development and believes in maintaining long-term growth for all stakeholders.”