THE Singapore High Court has ruled in favour of restaurant operator No Signboard Holdings : 1G6 0%, its chief executive officer and chairman Lim Yong Sim, and its controlling shareholder GuGong, in their dispute against No Signboard investor Gazelle Ventures.

 

This came as Gazelle sought a precautionary injunction against the three parties to restrain them from passing resolutions previously requisitioned by GuGong to, among other things, replace all of No Signboard&rsquo s current directors.

 

In a written judgment on Monday (Nov 20), High Court Judge Philip Jeyaretnam dismissed this claim as he said Gazelle would have no cause of action against Lim, Gugong or No Signboard even if the requisitioned resolutions were passed.

 

The claimant Gazelle also had not demonstrated that &ldquo irreparable harm&rdquo would be caused if the precautionary injunction was not granted, he added.

 

Alternatively, Gazelle sought a &ldquo freestanding&rdquo injunction. Jeyaretnam said there was &ldquo no such thing&rdquo as there was no cause of action or enforcement of a legal right.

 

As a result of the judgment, costs were awarded to Lim, Gugong and No Signboard &ndash with the amount to be agreed on between the defendants against Gazelle within 14 days.

 

&ldquo Gazelle has pointed out that the requisitioned resolutions, if carried, would result in five of Mr Lim&rsquo s family members being appointed to No Signboard&rsquo s board of directors and there no longer being independent directors. Any corporate governance issue arising from this is not a matter for this court but for consideration elsewhere,&rdquo concluded Jeyaretnam.

 

Addressing Gazelle&rsquo s concerns that its sums already disbursed to No Signboard was &ldquo practically irrecoverable&rdquo given the company&rsquo s financial state, he maintained: &ldquo Again this is not a matter before me, and I make no comment on Gazelle&rsquo s potential legal options hereafter&rdquo .

 

&ldquo Thirdly, nothing in this judgment should be taken as foreclosing potential causes of action that Gazelle may have for remedies in damages, including the potential causes of action raised by Gazelle before me.&rdquo

 

Earlier in September, the High Court granted Gugong permission to withdraw its intellectual property (IP) injunction application after both GuGong and No Signboard reinstated their IP sales and purchase agreement.

 

No Signboard was also ordered to pay GuGong legal costs of S$6,500 with &ldquo reasonable disbursements&rdquo .

 

Separately, Gazelle in May this year sent No Signboard a letter of demand for a refund of S$5 million in funds disbursed to it, citing concerns over the risks of leaving such funds with the company given its ongoing disputes with GuGong.

 

Shares of No Signboard were suspended from trading since January 2022, as the company at the time was unable to demonstrate its ability to continue as a going concern. It more recently submitted a revised trading resumption proposal in September, after earlier revisions in April.

RESTAURANT operator No Signboard Holdings&rsquo board has appointed Lim Teck-Ean as interim chief executive officer to oversee the group&rsquo s strategic direction, corporate development and investor relations. 

 

The current executive chairman and chief executive, Sam Lim, faces charges of share price rigging under the Securities and Futures Act. If convicted, he may be jailed for up to seven years or fined up to S$250,000, or both.

 

On Tuesday (Oct 10), No Signboard said: &ldquo The board of directors reviewed and considered Lim Teck-Ean&rsquo s qualifications, working experience, capabilities and ability to contribute to the company and other relevant factors.&rdquo  

 

Lim Teck-Ean will also be designated executive director of the company. Prior to his appointment, the 48-year-old was one of the beneficial owners of Gazelle Ventures, an entity which had invested in No Signboard.

 

Gazelle is expected to hold 75 per cent shareholding interest in the enlarged share capital of No Signboard upon completion of the investment. Lim has since stepped down as CEO of Gazelle. 

 

Meanwhile, No Signboard said Sam Lim is on a leave of absence pending the resolution of the proceedings related to the charges against him.

NO Signboard Holdings said on Wednesday (Sep 27) that it has submitted a further revised trading resumption proposal to the Singapore Exchange Regulation (SGX RegCo) &ldquo due to recent developments in the company&rdquo .

 

Trading in the shares of the Catalist-listed restaurant operator has been suspended since Jan 24, 2022, as it was unable to demonstrate that it can continue as a going concern.

 

The company previously announced in January 2023 that it had submitted a trading resumption proposal to SGX RegCo, and later said in April that it had made revisions to the proposal.

 

Last Sunday, No Signboard said it has reinstated the agreement to engage its largest shareholder GuGong to provide services for operational matters, as well as that to sell its trademarks and brand name to GuGong.

 

Both agreements were formerly announced by No Signboard to have been terminated in March 2023, a move it then said would purportedly &ldquo expedite the completion&rdquo of a proposed investment.

 

RESTAURANT operator No Signboard : 1G6 0% has reinstated the agreement to engage largest shareholder GuGong to provide services for operational matters as well as that to sell its trademarks and brand name to GuGong.

 

In an update to the bourse on Sunday (Sep 24), the Catalist-listed company said the parties have consented to reinstate the independent contractor agreement entered into on Dec 9, 2022 to engage GuGong&rsquo s services for operational matters.

 

The services that GuGong is to render include setting up new outlets in Asia, identifying potential opportunities in line with its strategic plan, and assisting in the transition of daily operations to the new management.

 

While the High Court granted an order for the reinstatement of this agreement at the hearing on Sep 20, No Signboard said the judge did not, as requested by GuGong, declare that this agreement was wrongfully terminated by the restaurant operator.

 

No Signboard has also reinstated its sale and purchase agreement &ndash entered the same day as the independent contractor &ndash to sell GuGong all its rights, title and interest in the trademarks and brand insignia associated with the enterprise and operations of its seafood and restaurant business.

 

A hearing has been fixed by the High Court on Monday to deal with the withdrawal of the injunction application in relation to the intellectual property sale.

 

Both agreements were formerly announced by No Signboard to have been terminated in March 2023, a move it then said would purportedly &ldquo expedite the completion&rdquo of a proposed investment.

 

GuGong counts suspended chief executive Lim Yong Sim and former chief operating officer Lim Lay Hoon as directors and shareholders.

 

No Signboard has made the news in recent years over its struggle in the pandemic years to a requisition from GuGong to oust the board, and the arrest of substantial shareholder and former director Su Haijin in the billion-dollar money-laundering bust.

 

Shares of No Signboard have been suspended from trading since Jan 24, 2022.

THE connection of a former director of Catalist-listed No Signboard Holdings with a billion-dollar money laundering bust is the latest warning that companies should exercise greater care in their selection of directors.

 

To be clear, investigations are still ongoing and the former director has not been found guilty of any offences. Nonetheless, his role at No Signboard should raise some eyebrows. What good is a director who appears to do nothing on a board?

 

No Signboard on Aug 22 issued an announcement clarifying that Su Haijin was not involved in the day-to-day operations of the company.

 

That is fair enough. Non-executive directors, as the name suggests, are not part of the executive management team.

 

The company went on to add that Su also did not attend or take part in board meetings. He received neither remuneration nor fee, as he was non-executive and non-independent.

 

No Signboard was probably trying to soothe rattled investors yet, its response creates other concerns.

 

How could a director who did not attend any board meetings throughout his tenure &ndash from October 2021 to June 2022 &ndash be familiar with the company&rsquo s operations and be in any position to give advice?

 

According to a guide by the Singapore Institute of Directors, a non-executive director such as Su is expected to be familiar with the business and stay informed about its activities.

 

They should also constructively challenge and review the performance of a company&rsquo s management, as well as participate in decisions on the appointment, assessment and remuneration of executive directors and key management personnel.

 

One could argue that a director such as Su does not add any value to a company&rsquo s board.

 

Su was appointed to the board following his acquisition of a 20 per cent stake in the company from controlling shareholder GuGong.

 

Under such circumstances, an individual in Su&rsquo s shoes might have merely held the board seat to ensure his own interests are represented on the board.

 

Even so, investors lose out if boards are made up of individuals who do little to help chart the path forward for companies.

 

The wherewithal to acquire a stake in a company, or even control of a company, does not mean an individual will do a great job as a director.

 

Back in 2020, two individuals acquired control of a company that now goes by the name Axington.

 

The two, cousins by the name of Terence Loh and Nelson Loh, claimed they wanted to inject a business they had founded into the listed entity.

 

That plan came to naught, and Nelson Loh has been charged with forgery offences.

 

Such incidences should signal to companies and regulators that the existing checks and balances for directors are insufficient.

 

Merely training a first-time director and ensuring the individual receives regular updates on matters such as new laws or regulation changes &ndash as stated in the Singapore Exchange rulebook &ndash will not deter motivated individuals.

 

Perhaps, stringent screening should be a requirement before a board appointment. Boards may also need to be subject to occasional surprise checks and audits.

 

Other members of a board, as well as regulators, should also be proactive in maintaining and even improving the quality of boards and board meetings. If necessary, efforts should be made to remove directors who are not contributing.

 

Shareholders, too, should demand greater transparency. They should exercise their vote and signal disapproval with board appointments that don&rsquo t seem justified.

 

When directors carry the primary responsibility of leading a company and discharging their fiduciary duties, shareholders must ensure these directors have the right attributes to fulfil their roles in the first place.

 

In the event that they do not, there should be rules to ensure that these directors can be removed before irreversible damage is done.

 

RESTAURANT chain No Signboard Holdings : 1G6 0% on Friday (Sep 2) filed an application with the court to subject creditor OCBC to its ongoing debt moratorium, so that the bank may not initiate any legal proceedings against the company.

 

This comes as No Signboard and OCBC have not been able to agree on the terms of repayment of a S$3 million outstanding bank loan, the company disclosed in a Monday (Sep 5) bourse filing.

 

No Signboard believes that it will not have sufficient funds to make the monthly repayments of the loan from September, until it completes the agreement entered in July with potential investor Gazelle Ventures.

 

No Signboard is in the midst of a court-supervised process to restructure its liabilities. The Singapore High Court had in May granted the company and 2 of its subsidiaries, NSB Hotpot and NSB Restaurants, a moratorium until Oct 29.

 

Trading in shares of No Signboard has been suspended.

NO Signboard Holdings announced Friday (Jul 1) that it has entered into an implementation agreement with Gazelle Ventures, setting out the terms and conditions for the investor&rsquo s injection of up to S$5 million into the embattled seafood restaurant operator.

 

Under the deal, Gazelle Ventures pay an initial S$500,000 in exchange for new shares in No Signboard. Gazelle Ventures will also invest another S$4.5 million in the company through the subscription of convertible redeemable preference shares.

 

No Signboard said it will convene an extraordinary general meeting (EGM) to seek shareholders&rsquo approval for the allotment and issue of the subscription shares and convertible redeemable preference shares.

 

Among other things, No Signboard will also need shareholders to approve the transfer of controlling interest to Gazelle Ventures following the allotment and issue of these shares, as well as the amendment of its constitution to reflect the rights of the holders of the convertible redeemable preference shares.

 

Following the allotment of subscription shares, Gazelle Ventures will hold a 75 per cent stake in the restaurant operator.

 

No Signboard said the investment is intended to provide the company with sufficient funds for working capital purposes, to settle its liabilities upon the successful implementation of its restructuring exercise, and to operate as a going concern.

 

The Catalist-listed company is in the middle of a court-supervised restructuring exercise, which is to include a scheme of arrangement with the scheme creditors &ndash on terms acceptable to investor Gazelle Ventures &ndash to reorganise the company&rsquo s liabilities and deleverage the balance sheet of the group.

 

The Singapore High Court in May granted No Signboard and 2 subsidiaries &ndash NSB Hotpot and NSB Restaurants &ndash a moratorium until Oct 29. The court also granted super priority status over the debt arising from rescue financing secured by No Signboard from Gazelle Ventures.

 

No Signboard said the terms of the scheme are subject to finalisation through discussions and negotiations with the scheme creditors and Gazelle Ventures on the terms of the implementation agreement.

 

Gazelle Ventures, which invests in food, agritech and sustainable agriculture-related businesses, is a Singapore-incorporated company jointly owned by Gazelle Capital and Valiant Investments.

DEBT-LADEN No Signboard Holdings said the Singapore High Court has granted it and 2 of its subsidiaries a moratorium lasting till Oct 29.

 

On Apr 29, the embattled restaurant operator and wholly owned NSB Hotpot and NSB Restaurants applied for moratorium relief spanning 6 months, under Section 64 of the Insolvency, Restructuring and Dissolution Act.

 

They sought court orders that no resolution shall be passed to wind up the companies and that no legal process shall be commenced or continued against any property of the applicants, among other things.

 

The grant of the moratorium on Thursday (May 26) is subject to disclosure requirements. No Signboard has to file an affidavit by Jun 20, and every calendar month thereafter, that discloses its consolidated monthly management accounts.

 

It also has to make available to the creditors the consolidated cash flow projections until the end of the moratorium period. The first disclosure has to be filed by Jun 20 and updated every 2 months.

 

If the company or the subsidiaries acquire or dispose of any property or grants security over any property, information about the transaction has to be submitted to creditors within 14 days.

 

The court on Thursday also granted super priority status over the debt arising from rescue financing secured by No Signboard from Gazelle Ventures, which has agreed to invest up to S$5 million into the group.

 

Gazelle Ventures, which invests in food, agritech and sustainable agriculture-related businesses, is a Singapore-incorporated company jointly owned by Gazelle Capital and Valiant Investments.

Ahead of its moratorium hearings on Thursday (May 26), No Signboard Holdings announced a lifeline by an unnamed investor who has agreed to invest up to $5 million into the debt-ridden restaurant operator.

 

In the event that the company winds up, the investor will get preferential liquidation rights for the rescue financing, according to the agreement terms that No Signboard disclosed in a bourse filing on Wednesday.

 

The High Court was scheduled to hear moratorium requests by the company and two of its subsidiaries, NSB Hotpot and NSB Restaurants, at 2.30pm on Thursday.

 

On April 29, the trio had applied for moratorium relief spanning six months under Section 64 of the Insolvency, Restructuring and Dissolution Act.

 

The court orders being sought are to ensure that no resolution is passed to wind up the companies and that no legal process shall be commenced or continued against any property of the applicants, among other things.

 

Specifically in No Signboard' s application, it has requested that OCBC Bank, which is the creditor of $3 million under a temporary bridging loan facility extended to the company in April 2020, be excluded from the terms of the moratorium order.

 

In the bourse filing on Wednesday, No Signboard said it entered into a memorandum of understanding for up to $5 million in super priority financing with the investor on April 30.

 

On May 24, the company then entered into an agreement to take up the offer, with a principal amount of $450,000 as an interim measure to obtain immediate and urgent short-term financing for its working capital requirements.

 

The rescue financing was intended to precede the disbursement of the balance of the investment amount by the investor, it pointed out, while noting that no interest is payable on the principal amount.

 

Trading of No Signboard' s shares has been suspended since Jan 24, 2022.

THE Singapore High Court will hear the moratorium requests by debt-laden No Signboard Holdings and 2 of its subsidiaries on May 26 at 2.30 pm, according to notices in the government&rsquo s official gazette.

 

On Apr 29, the embattled restaurant operator and its wholly-owned subsidiaries, NSB Hotpot and NSB Restaurants, applied for moratorium relief spanning 6 months, under Section 64 of the Insolvency, Restructuring and Dissolution Act.

 

No Signboard had said in its Apr 29 bourse filing that the Catalist-listed company was in the midst of negotiations with third parties as part of its efforts to restructure its liabilities.

 

The gazette notices, published on Friday (May 13) evening, said that Justice Pang Khang Chau will hear the 3 applications.

 

The trio is seeking court orders that no resolution shall be passed to wind up the companies and that no legal process shall be commenced or continued against any property of the applicants, among other things.

 

Specifically in No Signboard&rsquo s application, it has requested that OCBC, which is the creditor of S$3 million under a temporary bridging loan facility extended to the company in April 2020, be excluded from the terms of the moratorium order, the gazette notices stated.

 

According to the group&rsquo s latest annual report, NSB Restaurants operates quick-serve restaurants, and fully owns Hawker QSR and NSB-Crab Factory. Meanwhile, NSB Hotpot comes under the group&rsquo s franchise brand operator arm, NSB Global Franchise Management.

 

Food and beverage brands under the group include No Signboard Seafood, Little Sheep Hotpot, and Mom&rsquo s Touch Chicken and Burger. It also had a loss-making beer business.