To the unacquainted, the Ministry of Food (MOF) sounds like a government department that carries out official taste tests to ensure that local food maintains its deliciousness, but it’s actually a local restaurant chain that operates numerous eateries.
This includes Daessiksin Korean BBQ Buffet, Insadong Korea Town, and MOF My Izakaya, to name a few.
The shop has faced financial troubles since 2017 and was forced to close dozens of stores allegedly due to the COVID-19 pandemic.
Then, a man by the name of Chua Ngak Hwee came along and offered a friendly, interest-free loan to MOF’s founder, hoping it would be enough to bail the restaurant chain out of the crisis.
It wasn’t.
Not only did the man sue MOF for failing to pay the debt, the popular restaurant chain is now winding up.
So, what happened? Well, before we get to that, we’ll first have to travel back in time to 2017, when MOF’s financial woes began.
Failed Business Deal
In 2017, Ms Lena Sim, the founder of MOF, was sued $4.8 million by four shareholders of a Korean restaurant chain.
Ms Sim initially agreed to purchase the chain of South Korean restaurants that year for $5.5 million but only paid $700,000.
The shareholders then obtained a Mareva injunction against her in February.
Now, unless you’re a lawyer, you probably don’t know what a Mareva injunction.
It’s basically a court order that freezes a debtor’s assets to prevent her from getting rid of them without paying her debt, because let’s face it: many debtors would take out all their money and spend them on other countries when they know that they’re going to lose the case.
This particular injunction froze Ms Sim’s assets of up to a value of $4.8 million – the amount she owed.
But wait, if she had the money, why didn’t she pay up?
Ms Sim said she had told the shareholders that she would buy their restaurants only if she could resell them together with her other restaurants to a Thai conglomerate in 2017.
At that time, a Thai conglomerate wanted to acquire MOF and hired an accounting firm to go through its business records. But because the deal fell through, Ms Sim was unable to purchase the restaurant and pay the debt.
One of the shareholders of the Korean restaurant chain said that when their lawyers discovered Ms Sim had replaced herself with her elderly illiterate mother as the sole director of her 20 companies and put up her Wilkinson Road bungalow for sale, they decided to freeze her assets.
Closed Nearly All 80 Outlets By March 2020
After the proposed acquisition by the Thai conglomerate fell through, MOF had to shutter many of its outlets.
Specifically 40 in 2019.
After the acquisition fell through, Ms Sim’s business went through a major revamp.
“With the manpower crunch, I decided to shut all table-service concept restaurants which are no longer viable in Singapore’s food and beverage landscape. By the last quarter of last year, my company was operationally profitable,” she said in 2020.
But then the COVID-19 pandemic hit, and everything came crashing down. MOF’s sales dipped between 80-90% at 8 outlets, reported ST.
Banks subsequently froze Ms Sim’s personal accounts as well after finding out about the Mareva injunction.
Consequently, Ms Sim was forced to close even more outlets, as she was unable to pay landlords and suppliers even though overall business performance only went down by about 35%.
All this happened while she was involved in a spat with the founders of Takagi Ramen.
A Good Samaritan Wants His Money Back
Back in 2019, Ms Sim was offered a helping hand by a good Samaritan.
His name was Chua Ngak Hwee, co-founder of medical device company Healthstats. He gave Ms Sim a friendly, interest-free loan of $200,000, expecting it to be paid back in the future.
It wasn’t.
As a result, Mr Chua filed an application in January to wind up MOF. For those who don’t know, winding up is the process of collecting a company’s assets and selling them in order to pay its debts.
The application was granted on 9 Apr by the High Court.
The application will enforce an arbitration award of $4.8 million by the four shareholders of the Korean restaurant chain.
Mr Tam Chee Chong, the man who was appointed as MOF’s liquidator, said all of MOF’s restaurants have been closed.
DaeSsikSin Korean BBQ Buffet at Orchard Gateway is still operating, but under a different entity – Master Kitchen Concepts.
And Master Kitchen Concepts is owned by Dr Ting Choon Meng, the man who co-founded Healthstats with Mr Chua, who sued MOF.
This is like a Christopher Nolan movie where nothing makes sense.
According to Vulcan Post, Ms Sim has also been questioned by the Ministry of Manpower and had her passport impounded after she failed to pay employees’ wages.
MOF now joins countless other F&B businesses in Singapore which were forced to shutter due to the coronavirus outbreak.
The restaurant chain first opened in 2006 and operated 80 outlets across the country at the height of its popularity, with Asian and Western offerings.
Featured Image: YouTube (MySX30)
