SINGAPORE - 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, No Signboard said GuGong also sought to annul earlier resolutions – including a proposed share consolidation and a transfer of controlling interest – passed at the company’s annual general meeting 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 Mr 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.

It also noted that the new board to be elected consists of people related to Mr 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 Sunday issued a settlement offer with Gugong and Mr 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.

Alternatively, No Signboard proposes that GuGong pay the company $300,000 for the purchase of the IP, with the company, in turn, paying GuGong $365,000 in full and final settlement of ongoing legal proceedings.

The settlement offer is open for acceptance up until 5pm on Wednesday.

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 (F&B) outlets in Singapore, namely Little Sheep Hot Pot at orchardgateway, 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.

In the event that the company resumes trading, No Signboard intends to undergo a rebranding exercise which may include the re-naming of its existing brands.

Its board is also “actively searching for acquisitional targets and is in the final stages of acquiring two F&B businesses”, with the deal to be funded by Gazelle Venture’s investment.

Should Gazelle Ventures enforce its demand for a return of the full investment amount of up to $5 million, No Signboard said its financial position will be materially impacted, including the ability to meet its financial obligations as they fall due.

This article was first published in The Straits Times. Permission required for reproduction.