Darco Water Technologies Limited: Legal Proceedings Update – Key Details for Investors

Summary of Recent Developments

Darco Water Technologies Limited, a Singapore-incorporated company, has provided an important update regarding ongoing legal proceedings involving its subsidiary, Darco Industrial Water (DIW), and a supplier. This development follows earlier announcements and involves a significant claim and counterclaim in the Malaysian courts.

Key Points from the Report

• Legal Proceedings: The Penang High Court recently dismissed the supplier’s application for summary judgement. This is a notable event, as a summary judgement could have resulted in a swift resolution in favor of the supplier without a full trial.
• Counterclaim Filed: The Court has allowed DIW to submit a counterclaim against the supplier as part of an amended defence. DIW formally lodged this counterclaim on 31 October 2025.
• Financial Impact: DIW is seeking an aggregate amount of RM1,007,050 (approximately S\$313,917) from the supplier. In addition, DIW is seeking any further damages and/or costs, which are to be determined by the Court.
• Operational Impact: The Board does not expect the ongoing suit to affect the Group’s ability to continue its business operations.
• Impact on Financials: The suit is not expected to have any material impact on the net tangible assets or earnings per share of Darco Water Technologies for the financial year ending 31 December 2025.
• Further Announcements: The company has committed to updating shareholders on any material developments in the suit, including any impact on financials if the outcome changes.

Important Points for Shareholders

• Potential Price Sensitivity: Legal disputes, especially those involving significant sums, can be price sensitive. While the Board currently expects no material impact on financials or operations, investors should monitor future announcements closely, as the outcome could change the financial position of the company.
• Risk Considerations: The fact that DIW is counterclaiming for over S\$313,000, plus possible damages, means a favorable outcome could result in a financial benefit for the company. Conversely, any adverse developments could have unforeseen consequences.
• Management Action: The company’s active defence and counterclaim suggest management is taking robust steps to protect shareholder value.
• Commitment to Transparency: The company has promised regular updates, which is positive for shareholders seeking transparency and timely information.

Detailed Timeline of Events

1. Preceding Announcement: The company released a prior update on 24 April 2025 regarding the dispute.
2. 21 October 2025: The Penang High Court dismissed the supplier’s summary judgement application and allowed DIW to amend its defence and file a counterclaim.
3. 31 October 2025: DIW submitted its amended defence and counterclaim, seeking RM1,007,050 (approx. S\$313,917) plus additional damages/costs.
4. 7 November 2025: The Board, through its Executive Director and CEO Zhang Zhenpeng, reaffirmed in a formal statement that the outcome is not expected to materially impact the Group’s operations or financial standing for the current year.

What Should Investors Watch For?

• Outcome of the Suit: Investors should stay alert for further updates, as the final outcome of the suit may differ from management’s current expectations.
• Financial Impact: Any award of damages to DIW or adverse ruling could affect future reporting periods or cause a reassessment of financial guidance.
• Regular Updates: The Board’s commitment to releasing material updates provides shareholders with ongoing insight into the situation.

Conclusion

While the current assessment is that the legal proceedings will not have a material impact on Darco Water Technologies’ operations or financials for FY2025, investors should consider the inherent risks and monitor all future company announcements. Legal disputes can have unpredictable outcomes, and any changes in status or damages awarded could potentially influence share price.

Disclaimer

This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. The information presented is based on company announcements and may be subject to change as additional facts emerge.

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