Singapore restaurant chain Ministry of Food (MOF) is reportedly closing down after failing to settle its S$200,000 debt, which was incurred from an interest-free loan that was made in 2019.
The creditor is Chua Ngak Hwee — the co-founder of medical device company Healthstats — who had sued MOF last month when the company failed to repay him.
Chua had applied to wind up MOF, which was granted by the High Court on April 9.
MOF owns a slew of F&B brands under its Group, including Daessiksin Korean BBQ Buffet, Danro Collagen Hotpot Buffet, Insadong Korea Town, Ju Hao, Lenas, MOF My Izakaya, Social Square, Ssiksin Korean Grill BBQ Buffet Restaurant, and Terminal M.
The Group was first started in Singapore in 2006, but all restaurants under it have since closed down.
However, The Straits Times reported that Daessiksin Korean BBQ Buffet at Orchard Gateway is still operational as it is helmed by Master Kitchen Concepts, a separate business entity.
According to Accounting and Corporate Regulatory Authority (Acra) records, Master Kitchen Concepts was incorporated in December last year. It is owned by Dr Ting Choon Meng, a Ministry of Food director who served from 2016 to 2018. He is also the co-founder of Healthstats.
In February last year, MOF saw massive outlet closures in Singapore, shrinking its size from 80 to 26 outlets.
Particularly, two of its outlets — Ju Hao at Bukit Panjang Plaza and MOF My Izakaya at Lot One — were repossessed by landlord CapitaLand for failure to pay rent.
Founder Facing Financial Woes
Last year, The Sunday Times reported that MOF founder Lena Sim had been facing difficulties paying not only rental, but also suppliers and employees.
Her financial troubles trace back to a failed business deal in 2017, in which she had intended to purchase a chain of Korean restaurants and resell them to a Thai conglomerate who was in talks to acquire MOF.
Sim reportedly had agreed to buy the Korean restaurant chain for S$5.5 million, but only paid S$700,000 after the deal fell through.
As a result, four shareholders of the Korean chain — Lee Je-young, Soh Sow Hoon, Huh Suk Kyung and Lee Pil Young — sued Sim for the outstanding S$4.8 million.
In February 2020, they obtained a Mareva injunction against Sim, which refers to a court order that freezes the defendant’s assets to prevent them from dissipating the assets.
Her assets were frozen up to a value of S$4.8 million.
Sim also told The Sunday Times that she had executed a “major revamp” of MOF after the acquisition had fallen through.
Under pressure of the “manpower crunch”, she closed all table-service concepts that were thought to be “no longer viable in Singapore’s food and beverage landscape”, cutting down about 40 outlets in 2019 alone.
According to Sim, these downsizing measures helped the company turn operationally profitable by the fourth quarter of 2019.
However, the Covid-19 outbreak made a dent in the F&B industry, and MOF saw a 35 per cent drop in performance across the group. While some outlets could still get by, eight of them suffered steep falls in sales by 80 to 90 per cent.
On top of the pandemic impacts, banks have allegedly been freezing Sim’s accounts, including her personal accounts, after the Mareva injunction. Sim said this has prevented her from paying landlords and suppliers.
She was also questioned by the Ministry of Manpower (MOM) and had her passport impounded as she failed to pay employees’ wages.
Featured Image Credit: Ministry of Food
The post S’pore F&B Group Ministry Of Food To Close Down After Failing To Pay S$200K Debt appeared first on Vulcan Post.