SINGAPORE - Two former directors of Kimly were charged on Friday (Nov 12) with disclosure offences related to the listed coffee shop operator's acquisition of drinks manufacturer Asian Story Corporation (ASC) in 2018.
Kimly's former executive chairman Lim Hee Liat and former executive director Chia Cher Khiang were charged under the Securities and Futures Act in connection with the acquisition of ASC which was announced on July 2, 2018.
The police also said the former chief executive of Pokka International was charged with disclosure offences linked to the same manufacturer.
Alain Ong Eng Sin, whose wife is actress Vivian Lai, faces three charges under the Companies Act.
Ong, who was also a director in Pokka International and Pokka Corporation (Singapore), allegedly had partial beneficial ownership of ASC, and failed to disclose his interest to the two Pokka entities on three occasions when they and ASC entered into transactions.
In February 2017, Mr Ong became a non-executive and non-independent director of Kimly. He was asked to leave Pokka International in September 2018. Lai was a long-time celebrity endorser of the Pokka brand during his time as CEO.
In a clarification statement to the Singapore Exchange on Sept 30, 2018, Kimly neither confirmed nor denied the appointment of Mr Ong.
In November 2018, it was reported that Kimly was backing out of its $16 million acquisition, following an investigation by the authorities. Kimly and ASC received letters from the Commercial Affairs Department and the Monetary Authority of Singapore, requesting for documents.
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The police said on Friday that Kimly's acquisition was allegedly an interested person transaction, given Lim's partial beneficial ownership of ASC. This meant that the transaction should have been disclosed under the Singapore Exchange Catalist Rules, but purportedly was not.
Lim was also charged with one count under the Companies Act for allegedly failing to disclose his interest in the acquisition of ASC to Kimly.
In a regulatory update on Thursday, Kimly, which also runs food courts, said Chia and Lim had notified the board of their resignations.
Kimly's board has requested the two to remain as employees to assist and facilitate the board and management in the transition, pending the conclusion of court proceedings, the group said.
If convicted for offences under the Securities and Futures Act, they can be jailed for up to seven years, fined up to $250,000 or both.
If convicted for offences under the Companies Act, they can be jailed for up to 12 months or fined up to $5,000.
This article was first published in The Straits Times. Permission required for reproduction.