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Epicentre's ability to operate as going concern likely hit if forced to repay loan
EPICENTRE Holdings' ability to continue as a going concern will likely be materially impacted if it is forced to immediately repay a S$2 million loan owed to Julique Capital, the group said on Thursday.
The loan in question is owed by subsidiary Epicentre Pte Ltd (EPL) and tied to executive chairman and acting CEO Kenneth Lim Tiong Hian's control of EPL. Mr Lim has been uncontactable since May 24.
Under the terms of the loan, if Mr Lim ceases to control EPL, EPL may declare the loan immediately due and payable. Epicentre became aware on June 13 that Mr Lim's current shareholding in the group is 1.52 per cent. EPL must therefore notify Julique Capital of this development.
Epicentre said that if Julique Capital declares the loan immediately due and payable, the group would unlikely be able to repay all outstanding amounts, which will materially impact its ability to continue as a going concern.
Epicentre also updated on Thursday that creditors Goh Chee Hong and ELush (T3) Pte Ltd have obtained a Mareva injunction from the High Court against Mr Lim.
Under the injunction, Mr Lim must not dispose of, deal with or diminish the value of any of his assets in Singapore, whether in his name or not, and whether solely or jointly owned up to the value of S$3.85 million.
It will be considered contempt of Court for any person notified of the injunction to knowingly assist in or permit a breach of the injunction. Any person doing so may be sent to prison or fined.
Epicentre does not expect that the injunction will affect it as the company does not hold or control any of Mr Lim's assets.
The group is currently facing statutory demands from three creditors and seeking legal advice in relation to the demands.
An independent review of Epicentre Holdings' FY2017 accounts has also found "governance and internal control issues" regarding consultancy services agreements and a supply agreement in which Mr Lim was involved, as well as a breach of internal policy relating to a S$1.76 million loan, which might have amounted to breaches of listing rules.