SINGAPORE – Mary Chia Holdings has paid over $300,000 owed to Fullink Capital, but insolvency proceedings brought against it by the lender remain ongoing.
The Catalist-listed beauty and wellness group said in July 21 exchange filings that it had settled $343,829 in undisputed debts owed to Fullink, and also paid $14,000 in costs ordered by the High Court, on its lawyers’ advice.
The payments were made after a July 17 hearing, where the court noted that Mary Chia had admitted in an earlier application that the sum was payable but had yet to settle it.
A dispute between the two companies arose after Fullink issued a statutory demand dated March 17 seeking $902,640 from Mary Chia.
Mary Chia, its wholly owned subsidiary Organica International Holdings and certain related parties subsequently commenced court proceedings against Fullink on April 15 to seek a ruling on whether parts of the claim were enforceable.
These disputed amounts include default and late-payment interest, as well as restructuring and standstill fees arising from loan and settlement arrangements, Mary Chia said.
In SGX filings on April 12, Mary Chia said that Fullink had originally lent Organica International $350,000, guaranteed by Mary Chia.
Subsequently, Fullink commenced proceedings seeking to have Mary Chia declared insolvent over the unpaid claim.
At the July 17 hearing, Mary Chia and its related parties applied for the insolvency proceedings to be stayed until the court had ruled on their challenge to the disputed charges.
But Fullink sought to have Mary Chia’s challenge put on hold instead, while the insolvency proceedings were dealt with.
The High Court ruled in Fullink’s favour and stayed Mary Chia’s application pending the outcome of the insolvency proceedings.
Mary Chia stressed in its filing that the court has not ruled on whether the disputed interest, fees and other charges claimed by Fullink are enforceable. It has also not made an order to wind up the business.
The company emphasised that the $343,829 it paid was only the amount it accepted it owed, while continuing to dispute the remaining $558,811 claimed by Fullink.
Mary Chia said it still cannot reliably quantify the financial impact of the proceedings on its business, as the dispute has yet to be decided by the court and could be affected by the case proceedings or discussions between the parties.
It added that it would continue working with its legal advisers and take appropriate steps to protect the interests of the company and its stakeholders.
Meanwhile, a pre-trial conference to set out the next steps of the the insolvency proceedings has been scheduled for July 23.
As a result of these proceedings, Mary Chia has delayed its annual financial reporting and applied to the Accounting and Corporate Regulatory Authority for more time to hold its annual general meeting and file its annual returns for the financial year ended March 31.
In a separate filing on July 20, Mary Chia said the proceedings had taken up significant management time and resources while it was working on its year-end audit.
Turnover in its finance team, including the departure of finance personnel who were familiar with the group’s historical accounts and financial information, had also slowed the retrieval and reconciliation of financial records.
Mary Chia now expects to complete the audit and finalise its annual report by Aug 13.
The company was originally required to hold its AGM by July 31 and file its annual return by Aug 31. It is seeking to hold the meeting on Aug 28 and lodge the annual return by Oct 30.
For the financial year ending March 31, Mary Chia reported revenues of $11.86 million, which were down 71 per cent from $40.8 million in the previous year. The company ended the year with a loss of $2.3 million, compared with a profit of $603,000 the year before.
In its statements, Mary Chia also revealed that its controlling shareholder on May 28 confirmed that it would continue to provide financial support to the company for at least 12 months and would not demand repayments of amounts owed by the group.
Shares of Mary Chia closed July 22 at 1.8 cents.
