SINGAPORE – Singapore Exchange Regulation (SGX RegCo) has queried beauty and wellness firm Mary Chia Holdings on whether it can continue operating as a going concern after legal proceedings were launched against the company and its related parties by a creditor in April.
The May 14 queries came after The Straits Times, citing disclosures filed with the SGX, reported that Fullink Capital had initiated insolvency proceedings against Mary Chia Holdings, its subsidiary Organica International Holdings, founder and chief executive Ho Yow Ping and chief financial officer Su Jun Ming over money allegedly owed under financing agreements.
Insolvency proceedings are legal actions taken by a creditor when it believes the company it has lent money to may be unable to pay its debt.
The dispute is over a sum that Fullink Capital says Organica International owes under past loan and repayment arrangements.
Mary Chia has disclosed in exchange filings in April and May that Fullink Capital had originally lent Organica International a sum of $350,000, but following disputes relating to the loan repayments, Fullink Capital claimed the full outstanding amount as immediately due, together with late payment interest and other fees under the loan and settlement agreements. This sum amounts to $902,640.
However, Mary Chia said the dispute is not simply over unpaid loans, but also over additional charges imposed on the debt, including late payment fees, default interest and restructuring fees, which the company argues may be excessive and legally unenforceable.
In earlier filings, Mary Chia had said that it proposed paying a revised sum of about $354,379, based on its own calculation of the applicable interest, but Fullink Capital had rejected the proposal.
Consequently, Mary Chia and its related parties filed a separate court application in April asking the court to determine whether some of these charges are valid. This case is ongoing.
SGX RegCo asked the company and its sponsor to assess whether Mary Chia could still continue operating if the worst-case scenario occurred and Fullink’s claims succeeded fully in court.
In response, Mary Chia’s board said on May 14 it had reviewed the group’s legal strategy, cash flow, liquidity and potential financial exposure, and concluded that it can continue operating and meeting its financial obligations.
Mary Chia said its assessment took into account the fact that the legal dispute is still ongoing, so the amount ultimately owed has not yet been determined by the court, and the group continues to operate normally. The company has three outlets in Novena, Serangoon Central and Jurong, and one opening soon at Simei, according to its website.
The company added that its controlling shareholders, Suki Sushi and Ms Ho, have indicated continued financial support for the business if needed. It is also exploring potential fundraising activities and other corporate action to strengthen its financial position and continue operations.
Meanwhile, the Catalist-listed company’s sponsor, Evolve Capital Advisory, said it believes Mary Chia can continue meeting its obligations when they fall due, even if the amount claimed by Fullink is upheld in full, based on the availability of controlling shareholder support, among other things.
Mary Chia was also asked to provide an update on the legal proceedings.
It said a case management conference was held on May 6, during which the Singapore courts directed that all cases relating to the dispute must be addressed together in future case conferences.
Mary Chia said the court had directed Fullink to file its reply affidavit in relation to Mary Chia’s court application challenging the validity of the fees and interest charges payable by May 13.
Mary Chia and the other parties involved must also file applications seeking to stay the insolvency proceedings by the same date.
The next court conference has been scheduled for May 21.
Mary Chia added that Fullink has since filed its reply affidavit, and separately also applied to pause Mary Chia’s court application challenging the disputed fees and charges.
The company said it is taking legal advice on the implications of the latest move.
