CSE Global's (SGX:544) wholly owned subsidiary, CSE W-Industries, has started the process of filing legal proceedings against a client in Texas, according to a filing with the Singapore Exchange on Friday.
The subsidiary was tapped by the customer to be a sub-contractor on a construction project in the US.
In connection with the project, both the company and the subsidiary had applied for a counter standby letter of guarantee from a bank which was issued in favor of the customer.
The customer called the standby letter of guarantee, after which the bank made a payment of $6 million to the customer on Dec. 20, which the company believes to be without merit.
The company expects an impact on its financial performance for the year ending Dec. 31 in case it is unable to recover the amount through legal proceedings.
Shares of the technology company were down nearly 7% in recent trading.
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