1.1 BDB/the Defendant had appointed HGT / the Plaintiff as contractor to extract timber at "Project Pembinaan Trans Eastern Kedah Interland Highway from Durian Burung to Kupang, Kedah" via two (2) Letter of Awards ("LA") dated 21st June 2006 (1st LA) and 19th August 2007 (2nd LA) respectively for logging sub-contract.

1.2 HGT/the Plaintiff is claiming that based on the 1st LA, the area for logging should have been 714 hectares whereas they could apparently extract timber from only 185 hectares, thus resulting in a shortfall of 528.83 hectares.

HGT/the Plaintiff is therefore suing BDB/the Defendant alleging breach of contract and is claiming RM 22,432,588.50 as damages.

1.3 In its statement of defence, filed by BDB's/ Defendant's solicitors, Messrs Vazeer, Akbar, Majid & Co on 5th August 2009, BDB/the Defendant contended that:-

i) HGT/the Plaintiff never suffered any losses by its own admission in its summons that it made a net profit of more than RM6.0 million.

ii) It is not BDB's/ the Defendant's responsibility to ensure that there are logs in the entire 714 hectares.  On the contrary HGT/the Plaintiff like any other logging contractor should have done its  own survey on Timber availability.

iii) HGT/the Plaintiff had been found guilty by Jabatan Perhutanan Negeri Kedah (JPNK), which fact is admitted by HGT/the Plaintiff by paying the compounds imposed, of the following offences committed during the tenure of the logging contract:-

a. Illegal logging outside the approved areas, which act tarnished the image of BDB/the Defendant;

b. Damage to Public roads;

c. Landslide caused by irresponsible logging; and

d. Polluting and clogging up rivers flowing through the concession area.

iv) HGT/the Plaintiff failed to complete the logging activities within the stipulated contract time frame resulting in monetary losses to BDB/the Defendant as at the material point in time BDB/the Defendant was the contractor for a major road project in that area, namely the "Trans Eastern Kedah Interland Highway from Durian Burung to Kupang, Kedah."

v) In the view of the aforementioned breaches on the part of HGT/ the Plaintiff, BDB/the Defendant in counterclaiming an amount of RM 30 million against HGT/the Plaintiff representing:-

a. Exemplary damages for RM 30 million;

b. Secret profits made by HGT/the Plaintiff through illegal logging;

c. Aggravated damages;

d. General damages.

1.4 In addition to the counter claims, BDB/the Defendant, through its solicitor, had on 7th September 2009 filed an application for striking off the Writ of Summons filed by HGT/the Plaintiff under Order 18, Rule 19 of High Court Rules 1980 on the following grounds:-

a. It has no basis of claim;

b. It is scandalous, frivolous and vexatious;

c. It may prejudice, embarrass or delay the fair trial of the action;

d. It is an abuse of the process of the Court.

The court has fixed 10th November 2009 as the date to hear the petition to strike off filed by BDB/the Defendant.

2.0 Withholding of Material Information Pursuant to Paragraph 9.05 of the Bursa Malaysia Listing Requirements.

BDB delayed this announcement so as not to prejudice its case as it pursued its objectives to file a striking off application and counter claims.

3.0 Financial and Operational Impact of the Group

At this moment, the legal action is not expected to have any adverse material impact on the earning and Net Tangible Assets of BDB.

4.0  Steps Proposed to be Taken

The Directors have instructed its solicitors to take all appropriate legal actions to defend the interests, good standing and innocence of BDB.

5.0 Directors and Substantial Shareholders' Interest

None of the Directors and substantial shareholders of BDB or person connected to the Directors and substantial shareholders has any interest, whether direct or indirect in the said contract.

This announcement is dated 20th October 2009.