Cape EMS dissmisses legal suit by Aeronas as collaboration “only exploratory at MOU stage”

 

MAIN Market-listed electronic manufacturing services (EMS) solutions provider with global presence, Cape EMS Bhd, has clarified that the proposed collaboration between its wholly owned subsidiary Cape Manufacturing (M) Sdn Bhd (CMM) and Aeronas Aerocraft Sdn Bhd was limited to a memorandum of understanding (MOU).

The MOU inked on March 9, 2025 merely served as a framework document for the parties to conduct preliminary discussions and to carry out initial development works for an assembly workshop for light aircrafts.

“CMM and AeroNas did not enter into a final commercial agreement or a binding comprehensive implementation arrangement,” Cape EMS pointed out in light of a writ of summons and statement of claim dated May 5 by Aeronas in the Johor Bahru High Court.

The proposed collaboration was expressly subject to the fulfilment of various conditions, including but the successful establishment of a light aircraft assembly plant, the obtaining of all relevant regulatory approvals and compliance with applicable commercial, technical, operational, financial and corporate governance requirements.”

“The group remains committed to disciplined execution, sound corporate governance and responsible decision-making principles,” commented Cape EMS’ CEO Christina Tee Kim Chin.

Cape EMS Bhd CEO Christina Tee Kim Chin

“A MOU is generally used as an instrument to record the intentions and framework arrangements between cooperating parties. It serves as a preliminary document for parties to subsequently enter into a formal agreement.”

Counter suit

All in all, Cape EMS stressed that the proposed collaboration was exploratory and conditional in nature from the outset.

To date, apart from the scope covered under the said MOU, the parties have not executed any binding commercial execution agreement, definitive investment documentation, formal operational arrangement or any conclusive implementation agreement.

“Cape EMS takes the position that any claims, allegations or purported assertions of rights beyond the scope of the original MOU lack proper contractual and legal basis,” asserted the group.

“We wish to clarify that the claims made by AeroNas against CMM in the legal proceedings are without factual or legal basis, made in bad faith to embarrass CMM and Cape EMS, devoid of any merits and are purely speculative.”

As such, the group has instructed its solicitors to make the necessary applications to the High Court for AeroNas to provide further and better particulars of the claims made against CMM and in the event AeroNas is not able to substantiate the claims, to apply to the High Court to strike out the claims made by AeroNas.

In particular, Cape EMS pointed to the following claims by Aeronas Aerocraft:

• The alleged special damages amounting to RM10.03 mil are without any basis as Aeronas has wholly or partly failed in the performance of its obligations under the MOU;
• The alleged special damages amounting to RM40 mil which is the financial assistance proposed to be extended by CMM for setting up a production assembly plant for 30 aircrafts annually did not materialise as Aeronas failed to produce confirmed book orders and customer placement of monetary deposits for the sale of 30 aircrafts; and
• The alleged loss of revenue amounting to RM229.5 mil by Aeronas are based on the alleged sale of 30 aircrafts by Aeronas which are purely speculative, hypothetical and unproven as AeroNas again failed to produce confirmed book orders and customer placement of monetary deposits for the sale of 30 aircrafts.

At the close on Friday’s (May 8) market trading, Cape EMS was unchanged at 29 sen with 6,6 million shares traded, thus valuing the company at RM288 mil. –  Focus Malaysia