Botched Ntegrator to Watches.com name change is just the tip of the iceberg in its remaking journey

THE decision by Catalist-listed Watches.com to revert to its former name of Ntegrator barely a year after it switched things up should serve as a reminder of why companies should take their time rebooting.

In May last year, Ntegrator International – a communications network specialist and systems integrator – started calling itself Watches.com after it received the nod from shareholders for a name change and a diversification agenda.

According to the company, the new name would better reflect its new business direction and enhance its branding as it moved into the omnichannel retailing of watches.

The refresh had followed the entry of a new substantial shareholder – Mission Well – in 2021, which resulted in a board revamp. This included the appointment of Mission Well’s sole shareholder and director Christian Kwok-Leun Yau Heilesen as executive director at Watches.com. The self-styled “Internet entrepreneur” hails from Copenhagen, Denmark, but is based in Hong Kong. He is also executive director and controlling shareholder of another Catalist-listed company: Incredible Holdings .

But the name change from Ntegrator International to Watches.com was done and dusted even before the company’s acquisition of the domain name Watches.com was complete. In place was a mere non-binding letter of intent inked with the seller – Watchismo LLC, an online seller of watches operating under the Watches.com domain – which expired at the end of June 2022.

With that, the company has to drop calling itself Watches.com and has picked Ntegrator Holdings. It will seek shareholders’ approval for this change at a meeting to be held in early March.

The flip-flop on the name change is not Watches.com’s biggest headache.

To kickstart its diversification, loss-making Watches.com made two back-to-back acquisitions worth S$29.6 million. This was funded via the issuance of promissory notes.

It bought an 85 per cent stake in Gadmobe Group – a company that provides data analytics, payment gateways, digital advertising and e-commerce solutions, among others – from a third-party vendor. The company also picked up a 55 per cent stake in Golden Ultra, whose subsidiary CKLY Trading (CTL) sells luxury watches via an online platform. This stake was acquired from Heilesen.

With these acquisitions, the company claimed it would be able to grow both its new and existing businesses through digitalisation and data analytics.

It has been tough going for the company, to say the least. The watch business has drawn some bad press with an ongoing probe by Hong Kong customs, while questions linger over the two deals.

In August last year, the Hong Kong Customs and Excise Department (C&E) investigated CTL’s business premises and seized some 500 watches valued at S$30,000. Heilesen and two sales staff were instructed to assist with the probe and were subsequently released on bail by the police.

In an October update, Watches.com said CTL has instructed its legal advisers to explain and clarify to C&E that the company has not contravened any provision under the Trade Description Ordinance and for the allegations to be withdrawn. The investigations are ongoing and there has been no update on the matter as Watches.com said “it will take a period of time” for C&E to reach a decision.

Meanwhile, it has been a good eight months since the Singapore Exchange Regulation or SGX RegCo shot a lengthy Notice of Compliance to query the company over its two acquisitions.

Heilesen-controlled Incredible had also bought into Golden Ultra and Gadmobe around the same time Watches.com entered into the share purchase agreements with these companies. The Golden Ultra acquisitions by both Incredible and Watches.com would therefore be deemed interested person transactions.

The regulator pointed out that the corporate actions would result in both Watches.com and Incredible having joint investments in the same businesses and cross shareholdings in each other, and that the rationale of the transactions was unclear. In addition, the regulator pointed out that both companies have “substantially similar members” on their audit and nominating committees.

SGX RegCo has instructed both companies to appoint a suitable joint independent reviewer to perform a holistic review of all corporate actions and fund-raising exercises announced by them in the last 12 months and has barred them from proceeding with any announced corporate actions and fund-raising exercises. Both companies also cannot propose any further corporate actions until the review is completed, and the air is cleared on the outstanding issues.

The companies have appointed Provenance Capital as joint independent reviewer. Meanwhile, trading in Watches.com and Incredible has been suspended since last September. Watches.com cited the need to monitor the progress of the investigation in Hong Kong and the finalisation of the independent review as per SGX RegCo’s demand.

A revamp that began with some promise has since morphed into a source of uncertainty. Shareholders of Watches.com can be forgiven if they are missing the group’s older business model. After all, the communications network and systems integration segment won fresh jobs over the past year. Sometimes, old is better.