Kunshan Kanto Buhin Manufacturing Co., the wholly-owned subsidiary of Hoe Leong Corporation, was served with a notice of litigation on August 20 in China.

The notice of litigation comprised a statement of complaint from Hoe Leong Plastic Industry (China), a company wholly-owned by Hoe Leong Co., and owned by the Kuah family.

The family, together with Hoe Leong Co., directly and indirectly owns a 29.24% stake in Hoe Leong Corporation.

The notice of litigation also included a notice of response dated August 17 that Kunshan Kanto may submit a statement of defence within 15 days after receiving the statement of complaint, and appoint a legal advisor to defend itself.

The statement of complaint, which is related to the outstanding rent owed to Hoe Leong Plastic Industry by Kunshan Kanto for the lease of a factory building located at No. 988 Kunjia Road.

According to the statement, Hoe Leong Plastic Industry has alleged that Kunshan Kanto has “repeatedly refused to make payment” of the outstanding rent of RMB4.1 million ($809,137) as at July 31.

Hoe Leong Plastic Industry has also requested for Kunshan Kanto to pay the outstanding rent plus interest, as well as the cost of the litigation proceedings.

In an SGX filing on August 24, Hoe Leong Corporation has denied the claims. The company says that Kunshan Kanto has been “diligently making payment” of the outstanding rent since January, and that the total amount for outstanding rent is “incorrect”.

Shares in Hoe Leong last traded at 0.2 cents.