Lead ID of Kitchen Culture Writes to Shareholders Expressing Concerns About Major Shareholder OOWAY Group Which is Leading Second Attempt to Call for EGM To Remove 5 Directors
The Lead Independent Director ("Lead ID") of Kitchen Culture
Holdings Ltd. ("Kitchen Culture" or the "Company"), in a letter to
shareholders today, has expressed concerns about promises made to
the Company by its largest shareholder, OOWAY Group Ltd. ("OOWAY"),
which is leading a second attempt to remove 5 of 6 directors via an
extraordinary general meeting ("Second Intended EGM").
While Kitchen Culture's Board, acting on legal advice, has
announced that the Second Intended EGM scheduled for this Friday is
defective and invalid for non-compliance with the Companies Act
1967 and the Company's Constitution, Lead ID William Teo Choon Kow
("Mr Teo") said shareholders have raised concerns about OOWAY and
have continued to seek answers about its promises to the
OOWAY and 7 individuals (the "Requisitioners") who own an aggregate
of 21.71% of the Company's shares have made 2 attempts in recent
weeks to remove Mr Teo and 4 others - Mr Lim Wee Li (Executive
Director), Mr Lau Kay Heng (Non-Executive Non-Independent
Chairman), and IDs, Mr Ang Lian Kiat and Mr Peter Lim King Soon.
The Requisitioners want to replace them with 5 others.
The Experience of OOWAY's Involvement with Kitchen Culture
Recounting the inception of OOWAY to SGX-Catalist listed Kitchen
Culture since October 2020, Mr Teo said the business of providing
solutions and products for kitchens and wardrobes had not been
profitable for years. As such, the Board was excited when it was
presented with the prospect of a new business being injected via a
deal to acquire shares in OOWAY Technology Pte. Ltd ("OOWAY
A team from the OOWAY Group presented its Asian Accounts Receivable
Exchange ("AREX") as "a world's first online platform for trading
accounts receivable assets". The platform, running on a digital
currency, Lantana, was said to be able to assess and transact up to
US$30 billion worth of assets by 2023, its key adviser Mr Liu
Yanlong ("Mr Liu") told Kitchen Culture's Board and other
After AREX was launched online on 23 February 2021, Kitchen Culture
viewed OOWAY as a 'white knight' that could transform the Company's
business fortunes. Madam Hao Dongting ("Mdm Hao") - indirectly a
47% shareholder of OOWAY - and Mr Lincoln Teo Choong Han
("Lincoln") joined the Company's Board of Directors in April 2021.
Lincoln was named Interim CEO of Kitchen Culture 3 months
"What came next was a bolt from the blue," Mr Teo said. Shortly
after his appointment as Interim CEO, Lincoln suddenly stated at a
Board meeting in July 2021 that AREX had "nothing to do" with OOWAY
and was a 'separate exchange altogether'. In spite of this the
Board remained hopeful that Lincoln and OOWAY would be able to
bring in other businesses. "As events have shown, this hope was
misplaced," Mr Teo said.
As confirmed by OOWAY Technology Group, its main revenue for the
financial year ended 2021 and the 6-months ended 30 June 2022 was
generated from selling parallel imported cars in the People's
Republic of China (a business with extremely narrow margins); it
incurred substantial losses which have reduced its net assets
significantly. Mr Teo noted that this was despite that OOWAY Group
listing on its website big names such as Bank of China, ICBC Bank,
DBS Bank and Amazon as collaborative partners.
"These discoveries are extremely concerning. I recently carried out
a Google search on AREX and, to my surprise, I could only find two
English-language reports on AREX. The AREX website referred to in
the press release (www.sgarex.com) is also no longer active," Mr
Further concerns over the OOWAY Group's actions
Mr Teo also stated several other concerns about the actions of
OOWAY Group, Mdm Hao and Lincoln:
1) OOWAY has not been able to bring in any significant business to
the Company, and the only 2 significant ventures it proposed 'have
been tainted with irregularities".
i) the first involved a transfer of US$480,010 to a Hong Kong
company to provide technology support for e-commerce. However, one
of the agreements was not dated and the funds transfer was executed
without obtaining appropriate due diligence, documentation or prior
Board approval. Fortunately, as announced on 14 October 2021, the
Company was able to recover a net amount of US$492,259.97 from the
Hong Kong company after terminating the transactions.
ii) the second, the Company - acting on OOWAY's recommendation
through Lincoln amid health concerns during the COVID-19 pandemic -
purchased S$600,000 worth of face masks in April 2021 from Anhui
Health Box Technology Co. Ltd for resale. Responding to directors'
concerns, Lincoln claimed OOWAY had ready buyers offering good
margins among its B2B channels, and named the U.S. Government as a
transacting party. Instead, Lincoln assigned staff to carry out B2C
sales and hired a "Regional Marketing Director" for this purpose at
a monthly salary of S$6,000. This was later increased to S$10,000
and resulted in the Company paying S$121,760 in total remuneration
to this staff between September 2021 and September 202.
To date, total sales achieved for the masks is S$41,624 while the
total costs incurred in this business amounted to S$797,046. The
shelf life of the masks will expire in January 2023.
2) Between July 2021 and July 2022 during which Lincoln was Interim
CEO, more than S$4 million of the Company's funds were depleted.
Apart from the 2 ventures listed above,
i) Lincoln recruited 4 employees between July to September 2021
from another company where he is a shareholder and director to
launch a digital trade business for the Company, some of whom
occupied positions which did not match their job experience. This
business did not get off the ground and the Company paid an
aggregate of S$408,240 to these 4 employees in salaries, allowances
and CPF until their employments were terminated by the new Board in
ii) Instead of leaving the Special Auditor to complete its
investigations on irregularities that happened during the past
management term to decide on the most appropriate course of action,
Lincoln spent more than S$1.1 million in legal fees in suits
against the former CEO and Executive Director Lim Wee Li and 2
Chinese employees of the Company.
3) The OOWAY Group had made various promises about injecting funds
into the Company but these were either never followed through on
its promises or contained terms or conditions which the Directors
deemed to be unacceptable.
Mr Teo said, "... There are serious question marks around why the
Relevant Shareholders, led by the OOWAY Group, are now mounting
their attempt to remove the current Board (save for Mdm Hao, its
own representative) and are going about their efforts in such an
antagonistic manner. In view of all of the circumstances above, the
Board considers that there may be a need for further investigation
into the representations made by the OOWAY Group..."
Kitchen Culture has also responded to a press release issued on ACN
Newswire by the requisitioners on 18 November 2022. The Company
announced that the press release had urged shareholders not to be
"discouraged" by the Company's statement about the validity of the
Second Intended EGM.
Acting on the advice of 2 lawyers, Kitchen Culture has told
shareholders not to attend the Second Intended EGM as notices sent
by requisitioners were defective and invalid.
However, to give 'appropriate room' for the wishes of the
requisitioners, the latter could "(i) bring before a Court for
determination those legal issues they do not agree with, or (ii) to
issue a proper and fully compliant set of documents and take all
steps to facilitate a proper general meeting of the Company", the
Board (with the exception of Mdm Hao) said.
Kitchen Culture shares have been suspended from trading since July
2021. Its Board has seen several changes since the involvement of
Kitchen Culture Holdings Ltd.
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This press release has been reviewed by the Company's sponsor, SAC
Capital Private Limited (the "Sponsor"). It has not been examined
or approved by the Singapore Exchange Securities Trading Limited
(the "SGX-ST") and the SGX-ST assumes no responsibility for the
contents of this press release, including the correctness of any of
the statements or opinions made or reports contained in this press
The contact person for the Sponsor is Ms. Lee Khai Yinn (Tel +65
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