Q&M Dental Group says its wholly-owned subsidiary, Q&M Dental Group (Malaysia) has filed a notice of arbitration on Oct 21 with the Singapore International Arbitration Centre (SIAC) against Dr Lee Chin Sze over disputes between the group and Lee in connection with the shareholders’ agreement made on Sept 12, 2012.
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Under the agreement, Q&M Dental Group (Malaysia) will acquire 70% of Lee’s shares in D&D Dental for a cash consideration of RM840,000 ($336,000 at the time).
Following the acquisition, Q&M Malaysia will hold a 70% equity stake in D&D Dental, while Lee will hold the remaining 30%. D&D Dental will, accordingly, become a subsidiary of the company.
Q&M says it has served a copy of the notice to Lee.
In the arbitration proceedings, Q&M seeks payment from Lee of RM840,000 ($274,446) plus 10% interest down to the date of payment with respect to Q&M’s right to have Lee repurchase its 70% shares of D&D, according to the terms of the supplementary agreement made on Nov 6, 2015.
Lee is also required to return other payments relating to annual guaranteed profit targets of RM77,000 each from FY2016 to 2019.
The arbitration is not expected to have a material adverse effect on Q&M’s operations and the financial performance of the group.
Shares in Q&M closed 1.5 cents higher or 3.2% up, at 48.5 cents on Oct 22.
