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BT EXCLUSIVE

Hour Glass co-founder Jannie Chan declared bankrupt

She was taken to court by licensed moneylender over S$4.1m unpaid debt

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Ms Chan was also made a bankrupt in 2016 by ANZ but the bankruptcy was annulled after a settlement.

Singapore

JANNIE Chan Siew Lee, the co-founder of mainboard-listed luxury watch retailer The Hour Glass, has been made a bankrupt for owing a licensed moneylender over S$4.15 million.

The bankruptcy application by SME Care against 73-year-old Ms Chan was granted by the court on May 27.

According to the judgment on a related hearing last year, SME Care gave a loan of S$500,000 to JASC Pte Ltd in July 2012, secured by a mortgage of two properties owned by JASC and a personal guarantee from Ms Chan. The prominent businesswoman is the controlling director and sole shareholder of JASC, which was incorporated in 2010. It is unclear what JASC's business activities are.

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The company defaulted on the debt repayment - despite the interest rate and the rate for late payment having been reduced from 7 per cent to 5.2 per cent per month after she went to court in 2014 in a bid to set aside the loan.

The mortgaged properties were also sold but the proceeds were not sufficient to discharge the debt. The court heard that Ms Chan did not want the mortgaged properties sold earlier - which might have discharged the debt then - but she was then facing bankruptcy proceedings from another creditor.

SME Care went after Ms Chan as guarantor to repay the debt, which had ballooned to S$3.69 million by September 2017. A bankruptcy search on Tuesday by The Business Times showed that the debt now stands at more than S$4.15 million.

Representing herself in SME Care's bankruptcy petition, Ms Chan has filed an appeal against the bankruptcy order, and the hearing is pending. SME Care's case is handled by Muralli Rajaram and Gabriel Peters of K&L Gates Straits Law.

This is not the first time Ms Chan has been served a bankruptcy order.

She was declared a bankrupt briefly in late 2016 for not repaying S$9 million owed to Australia and New Zealand Banking Group. But she settled the matter with the bank three months later and managed to get the bankruptcy order annulled.

Following that, her directorship at TYC Investment, which holds shares in The Hour Glass, was automatically reinstated. But there were court actions from TYC and Ms Chan over the reinstatement, which was later affirmed by the Court of Appeal.

A bankrupt faces disqualification from appointments including as a director, trustee or personal representative, as well as prohibitions such as no overseas travel without prior permission from the official assignee or private trustee administering the bankrupt's affairs while he or she remains undischarged.

A recent financial statement filed by The Hour Glass with the Singapore Exchange showed that Ms Chan is no longer a director at the retailer but remains "a substantial shareholder".

The company's annual report for 2018 states that Ms Chan has a direct stake of 0.01 per cent while her deemed interest arises from her shareholding in TYC, which owns 48.27 per cent of The Hour Glass.

TYC was set up in 1979 to hold shares in The Hour Glass and other family assets. Ms Chan was last reported to be holding 44 per cent of TYC's voting rights while her ex-husband and The Hour Glass' executive chairman and co-founder Dr Henry Tay has 46 per cent, with the remaining 10 per cent held by their three children.

Dr Tay remains the biggest individual shareholder even after transferring 25 million shares last week to his son Michael Tay, who is also The Hour Glass' group managing director.

For its latest financial year ended March 31, the group's net profit surged 41 per cent to S$70.4 million from S$49.8 million the year before. It has proposed a final dividend of three Singapore cents per share, up from two cents in 2018.

Ms Chan, who quit her directorship at The Hour Glass in 2016, was also in the headlines in recent years for disobeying a court order that restrained her from defaming and harassing her former husband. She is appealing against the two-week jail term for contempt of court, with the Court of Appeal hearing fixed on July 2.

Her daughter Audrey Tay also had a run-in with the law recently. Her appeal against a 22-month imprisonment for abusing drugs was dismissed in March.