No Signboard controlling shareholder requisitions EGM to remove directors amid legal dispute
RESTAURANT operator No Signboard Holdings has received a letter and notice of requisition from its controlling shareholder, GuGong, for an extraordinary general meeting to be held “as soon as practicable” to remove at least five of its directors and appoint new ones in their places.
On Monday (Jun 19), No Signboard said GuGong sought to annul earlier resolutions – including a proposed share consolidation and a transfer of controlling interest – passed at the company’s annual general meeting (AGM) on Nov 30, 2022.
GuGong is an entity controlled by No Signboard’s executive chairman and chief executive Lim Yong Sim, who is also a joint signatory of certain of No Signboard’s operational bank accounts.
Differing opinions between Lim and No Signboard’s current board, coupled with “serious financial challenges”, have “made it more difficult” for No Signboard to pay its employees and creditors, said the group.
This has led to various requests and demands for payments from parties such as the group’s landlord at Orchard Gateway shopping mall.
In its latest update, the group said it was seeking legal advice regarding the notice of requisition.
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It also noted that the new board to be elected consists of people related to Lim, making it “unclear” how the new board would comply with the code of corporate governance, which requires it to have an “appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company”.
Further, No Signboard on Jun 18 issued a settlement offer with Gugong and Lim to reinstate their intellectual property (IP) sales and purchase agreement, along with an independent contractor agreement.
Both agreements were formerly announced by No Signboard to have been terminated in March 2023.
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Alternatively, No Signboard proposes that GuGong pay the company S$300,000 for the purchase of the IP, with the company, in turn, paying GuGong S$365,000 in full and final settlement of ongoing legal proceedings.
The settlement offer is open for acceptance up until 5 pm on Wednesday (Jun 21).
No Signboard said this timeframe is in consideration of the company’s “serious financial challenges” including the potential withdrawal of support from its investor, Gazelle Ventures.
Shares of No Signboard have been suspended from trading since Jan 24, 2022.
The company currently operates two food and beverage outlets in Singapore, namely Little Sheep Hotpot at Orchard Gateway, and nosignboard Sheng Jian at Northpoint City.
It intends to operate these businesses with funds received from Gazelle Ventures in order to resuscitate its businesses, and also to effect a resumption in the trading of its shares.
All other F&B outlets formerly operated by No Signboard have been closed as the group liquidates its various loss-making and non-core subsidiaries.
Should Gazelle Ventures enforce its demand for a return of the full investment amount of up to S$5 million, No Signboard said its financial position will be materially impacted, including the ability to meet its financial obligations as they fall due.
Gazelle Ventures, however, recently agreed to release about S$60,000 of the full investment amount for No Signboard to pay its employees for May 2023, along with another S$90,000 for payments to its landlords and other creditors.
This was done as a goodwill gesture and in demonstration of support for the company, said No Signboard.
The company said it is working closely with Gazelle Ventures to resolve all outstanding issues regarding the implementation agreement for the latter’s investment.
This includes revising No Signboard’s proposal to resume trading, and setting out the plans to inject fresh related businesses into the group. A resumption of trading would also allow No Signboard to raise further funds from the secondary market if necessary, it added.
In the event that it resumes trading, No Signboard intends to undergo a rebranding exercise which may include the renaming of its existing brands.
Its board is also “actively searching for acquisition targets and is in the final stages of acquiring two F&B businesses”, with the deal to be funded by Gazelle Venture’s investment.
Further, the group said it issued a Jun 14 letter to retrieve franchise fees of S$103,440 from the ‘No Signboard’ Mattar Road restaurant on Geylang Road, adding that repayment is now “more urgent given the financial position of the company”.
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