If you are in possession of a mouth, you might be familiar with the Ministry of Food (MOF).
They operate numerous eateries like DaeSsiksin, MOF @ My Izakaya and Insadong Korea Town.
However, MOF, which used to boast 80 restaurants across Singapore, now has a mere 26, after 5 more outlets shut this weekend.
So, what happened?
Ministry of Food Shut Down More Outlets as Owner Faced Financial Woes Since 2017
It all started in 2017, when Ms Sim was sued $4.8 million by Korean businessman Lee Je-young and three others – Ms Soh Sow Hoon, Huh Suk Kyung and Lee Pil Young after a business deal fell through.
Sim initially agreed to purchase the chain of South Korean restaurants that year for $5.5 million but only paid $700,000.
She’s basically that friend in primary school who borrowed 10 dollars once and gave you 2 dollars, saying they’d pay the remainder soon. I’m still waiting for my 8 dollars, Ah Hock.
They later obtained a Mareva injunction against her in February.
Now, unless you’re a lawyer, you probably don’t know what a Mareva injunction. To be honest I think even most lawyers wouldn’t know what it is.
It’s basically a court order that freezes a debtor’s assets to prevent her from getting rid of them without paying her debt. Thanks, Wikipedia.
So, this injunction freezes her assets of up to a value of $4.8 million, the amount she owes.
But why didn’t she just pay them?
Ms Sim said she had told Mr Lee that she would buy his restaurants only if she could resell them together with her other restaurants to a Thai conglomerate in 2017.
That doesn’t sound like a great business plan to me, to be honest.
You see, at that time, a Thai conglomerate wanted to acquire MOF and hired an accounting firm to go through its business records. But the deal fell through and thus she was unable to pay her debts.
One of the shareholders of the Korean restaurant chain, Ms Soh, said: “When our lawyers found out that she replaced herself with her elderly illiterate mother as the sole director of her 20 companies and put up her Wilkinson Road bungalow for sale, we decided to freeze all her assets in case she dissipates everything and leaves us with a useless paper judgment.”
However, Ms Soh said she only did so at the advice of a fengshui master after her business started to decline.
Wait. Fengshui also involved one ah?
Closed 40 outlets last year
“After the acquisition fell through, my business went through a major revamp” Ms Soh said.
It went through a major revamp, alright.
Last year, Sim shut down 40 outlets, which is not an insignificant number by any means.
“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.
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This strategy worked until the COVID-19 outbreak, which caused sales to dip between 80-90% at 8 outlets, reported The Straits Times.
And things only got worse.
Banks froze her personal accounts as well after finding out about the Mareva injunction.
Due to this, Ms Sim is unable to pay rent and suppliers, which is why she has to shut down more outlets even though overall business performance only went down by about 35%.
Landlords may seize 11 more outlets at SingPost Centre Platform M by Monday (2 March) if she can’t pay the rent.
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Staff Affected
Ms Sim also expressed regret at the fact that many staff members had to lose their jobs as a result of the many closures, saying that their livelihood is her biggest concern.
“With the closing of every outlet, 15 to 20 people lose their jobs.”
You might not agree with the way Ms Sim handles her business dealings, but no one wants to see people lose their jobs.
Got into the Headline Earlier This Year Due to Disrupt with TRS Founder
If you’re saying, “I knew it, they got financial problem right from the start since 1819!,” don’t lie lah.
You’d have read the story about how the CEO passive-aggressively “insulted” the founders of TRS (Takagi Ramen Shop) after she backed out from a leasing contract and did not pay back the deposit on time.
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So now you know.
