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Masterskill Education Group Berhad / Annual Report 2012<br />
106<br />
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)<br />
26. CONTINGENCIES (Cont’d)<br />
In January 2007, Masterskill filed an application to the Kuala Lumpur High Court against KDSB, SKSB, K. Pasupathy, CYM and LKO<br />
seeking, among other things, a declaration that the SPA is still valid and subsisting, an interlocutory injunction to restrain KDSB<br />
and SKSB from terminating the SPA, and an injunction against CYM and LKO from entering the premises of Masterskill’s Cheras<br />
university college campus.<br />
With respect to the proceedings against CYM and LKO, on 6 August 2008, Masterskill withdrew the injunction application against<br />
them upon receipt of an undertaking by them not to enter the premises of Masterskill’s Cheras university college campus until<br />
the resolution of the proceedings.<br />
After the commencement of proceedings, Masterskill engaged in out of court discussions with KDSB and SKSB and in May 2008,<br />
KDSB, SKSB and Masterskill agreed to settle the claims. Pursuant to Masterskill’s settlement agreement, Masterskill would pay<br />
RM2,800,000 for the Six Properties. The sale under this settlement agreement is currently pending completion and Masterskill<br />
is expected to become the registered owner of the title to the Six Properties sometime in 2013. With respect to Masterskill’s<br />
proceedings against KDSB and SKSB, consent judgement was recorded on 14 July 2009 wherein KDSB and SKSB confirmed that<br />
Masterskill was the beneficial and legal owner of the Six Properties.<br />
In August 2009, K. Pasupathy filed an application to set aside the aforesaid consent judgement. His application was dismissed with<br />
costs in February 2011.<br />
With respect to the proceedings against K. Pasupathy, after Masterskill filed the original application, K. Pasupathy filed a counterclaim<br />
against Masterskill seeking vacant possession of the Six Properties. On 25 June 2008, Masterskill filed an application to<br />
strike out this counter-claim, which was rejected by the High Court in May 2009. At the same time, the High Court allowed an<br />
application made by K. Pasupathy to strike out Masterskill’s reply to K. Pasupathy’s defence. Masterskill have since appealed against<br />
both of these decisions.<br />
The High Court has on 13 September 2010 dismissed Masterskill’s application to set aside K. Pasupathy’s Judgement in Default<br />
dated 13 May 2009 with costs of RM5,000. The Court of Appeal had on 13 August 2009 stayed the effects of the Order which<br />
was obtained by K. Pasupathy to strike out Masterskill’s defence. The Court of Appeal’s decision is still in effect.<br />
The Court of Appeal fixed this matter for hearing of the intervener’s appeal on 21 June 2013 and further Case Management on<br />
27 June 2013. The matter is further fixed for Case Management on 23 June 2013 pending the outcome of all the Appeals at the<br />
Court of Appeal.<br />
27. RElATED pARTIES<br />
Identity of related parties<br />
For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company<br />
has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making<br />
financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common<br />
control. Related parties may be individuals or other entities.<br />
Related parties also include key management personnel defined as those persons having authority and responsibility for planning,<br />
directing and controlling the activities of the Group either directly or indirectly. Key management personnel includes all the<br />
Directors of the Group, and certain members of senior management of the Group.<br />
The Group has related party relationships with its significant investors, subsidiaries and key management personnel.