The four companies are Desaru Peace Holdings Club Sdn Bhd, Desaru Corniche Hotel Sdn Bhd, Desaru Convention Centre Sdn Bhd, and Desaru Estate Sdn Bhd.

In seeking the security before the Kuala Lumpur High Court, MRCB claimed that the companies are “insolvent” and do not have sufficient funds to satisfy any costs or expenses awarded in the event MRCB succeeds in the arbitration proceedings against the four.

Security for costs allows a defendant in legal proceedings to secure the cost of defending a suit brought by a losing plaintiff.

The arbitration proceeding involved payments for the construction of a resort in Kota Tinggi, Johor.

In its bid to obtain the security for costs orders, MRCB cited the 2019 and 2020 financial statements of the four companies which showed they suffered losses.

The construction giant claimed the four companies relied heavily on funding from third parties to support their daily operations.

“The mere fact that the defendants (four companies) are subsidiaries of Themed Attractions Resorts & Hotels Sdn Bhd – controlled by Khazanah Nasional Bhd – does not render its financial standing beyond reproach,” MRCB said.

The four companies objected to the application, claiming it was “obviously unsustainable”.

They also claimed the application was made in bad faith.