THE legal wrangling stemming from mainboard-listed sushi chain Sakae Holdings' involvement in the Bugis Cube commercial property venture has taken another turn, over more than S$90 million purportedly idling in the bank.
This time, Gryphon Real Estate Investment Corporation, essentially comprising about 90 investors, is suing Sakae and its executive chairman Douglas Foo for not paying out the property sales proceeds.
But Sakae's position is that the payment can only be made when pending lawsuits surrounding alleged financial irregularities at the special vehicle that invested in Bugis Cube, Griffin Real Estate Investment Holdings, are resolved.
Sakae announced the latest development on Wednesday.
According to court documents filed on Sept 8 and seen by The Business Times, Gryphon demands that part of the profits in the venture be distributed to investors as soon as possible.
Gryphon also alleges that legal action by Mr Foo and Sakae against Gryphon director Ho Yew Kong and former director Andy Ong resulted in delays in Bugis Cube renovations.
This allegedly led to liquidated damages of S$941,408.37 that Sakae and Mr Foo are liable for. Mr Foo is also allegedly liable for another late Goods and Services Tax (GST) penalty of S$169,478.10.
The Business Times understands that Sakae is in the process of filing a response.
Griffin is supposedly owned thus: by Gryphon (45.35 per cent), ERC Holdings (29.96 per cent) and Sakae (24.69 per cent).
For Sakae, the dispute centres around whether ERC, controlled by former Sakae director Andy Ong, is a valid shareholder of Griffin. ERC became a shareholder in mid-2012 due to a purported share option agreement.
Last January, Sakae raised the alarm over alleged financial irregularities at Griffin. They involved substantial payments to firms majority-owned or controlled by Mr Ong not disclosed to Sakae.
A legal spat intensified in the course of the year. There are currently a few lawsuits pending between both parties.
The dividend payment issue came about in a meeting between the feuding shareholders of Griffin last December.
Gryphon and ERC proposed that a portion of the profits be distributed to investors. Sakae refused. According to the plaintiffs in the latest suit, Mr Foo said this was because Griffin's accounts for the 2011 financial year were not finalised, and he was unsure who Gryphon shareholders were because of the disputed share option agreement that led to the current shareholding structure.
In another meeting between the three parties in July, Gryphon and ERC again failed to get Sakae to agree to distribute the profits.
They said interim dividends could be held by Gryphon on trust in case ERC was deemed not to be a shareholder of Griffin.
They alleged that if no dividends were paid before the previous two suits were resolved, this would be "highly prejudicial" to Gryphon's interests since their shareholding in Griffin was allegedly not in dispute.
Sakae closed at 66 Singapore cents yesterday, up a cent.