Key Points from the Litigation Update

• The Board of Directors has referred to previous announcements made on 14 March 2022, 19 September 2024, and 20 September 2024 concerning ongoing litigation.
• The case involves the company’s subsidiary (referred to as “Bast”), MDFF and Dato’ John, and was previously decided in the High Court of Malaysia on 18 September 2024.
• The High Court’s decision was in favour of Bast, allowing its claim and dismissing the counterclaim made by MDFF and Dato’ John.
• MDFF and Dato’ John subsequently appealed the High Court’s decision.
• Latest Development: The Court of Appeal of Malaysia, Putrajaya, has dismissed the appeal by MDFF and Dato’ John, thereby upholding and affirming the High Court’s decision.
• As a result, MDFF and Dato’ John are now jointly ordered to pay Bast the costs of proceedings, amounting to MYR 50,000 (approximately US\$12,000).

Key Implications for Shareholders

• Financial Provisioning: The company has already made full financial provision for this claim in the financial years ended 31 December 2020 and 31 December 2021. Therefore, the final outcome of this litigation is not expected to have a material impact on the Group’s current or future financial statements.
• Litigation Risk Reduced: With this final appellate decision, litigation risk related to this matter is significantly reduced, which could be viewed positively by the market.
• Potential Price Sensitivity: The removal of this legal overhang may be seen as a clearing event, potentially providing reassurance to investors regarding legal uncertainties. However, since provisions were already made, the direct financial impact is limited.
• The company has committed to updating investors should there be any further material developments.

Conclusion

The conclusion of this litigation and the affirmation of the High Court’s decision in favour of Serial System Ltd’s subsidiary is a noteworthy event. It eliminates a source of legal uncertainty and demonstrates the Group’s prudent approach in provisioning for such claims. Shareholders should note that the financial impact is already accounted for, but the resolution could improve investor sentiment and may have a positive effect on share price due to the removal of litigation risk.

The company continues to monitor the situation and will make further announcements if there are any material changes or new developments.

Disclaimer: The above article is prepared based on the information provided in Serial System Ltd’s official announcement. It does not constitute investment advice. Investors are advised to conduct their own research or consult a professional advisor before making any investment decisions.

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