The Ministry of Food (MOF) restaurant chain in Singapore has just closed five of its branches this weekend.
Two stores, Ju Hao at Bukit Panjang Plaza and MOF My Izakaya at Lot One, were recaptured by the owner CapitaLand on Friday (February 28) for non-payment of the rent.
These sudden closures bring up MOF, which had 80 restaurants in Singapore at its peak 26 sockets left,
Today (March 2), the 11-story platform M food court concept in the SingPost Center can also be confiscated if the rent cannot be paid.
The MOF owner's assets are frozen after the business goes wrong
MOF founder Lena Sim / Photo credit: WomenTalk
MOF belongs to the founder Lena Sim, who opened the first outlet on Marina Square in 2006.
Over the years the chain grew to nine brands, including MOF, MOF My Izakaya, Lenas, DaeSsikSin Korean BBQ Buffet, Ju Hao and Danro Collagen Hotpot Buffet.
The Sunday Times reported that Sim had difficulty paying not only the rent, but also suppliers and employees.
Her financial problems today stem from a failed business in 2017 in which she intended to buy a chain of Korean restaurants and resell it to a Thai conglomerate that was in talks about acquiring MOF.
Sim reportedly agreed to buy the Korean restaurant chain for $ 5.5 million, but later only paid $ 700,000 after her business with the Thai conglomerate failed.
As a result, four shareholders in the Korean chain, Lee Je-young, Soh Sow Hoon, Huh Suk Kyung and Lee Pil Young, sued Sim for the $ 4.8 million outstanding,
In February 2020 they have received a Mareva injunction against Sim (a court order that freezes the defendant's property to prevent it from dispersing the property).
This will freeze their assets to a value of $ 4.8 million, the outstanding amount specified in the order.
40 branches closed in 2019
Photo credit: falseiffany.blogspot.com
Sim also told The Sunday Times that she had “majorly revised” MOF after the acquisition failed.
Under pressure from the "Manpower Crunch", she closed all table service concepts that were considered "no longer sustainable in Singapore's food and beverage landscape". Around 40 branches were closed in 2019 alone,
According to Sim, these downsizing measures helped the company become operationally profitable by the fourth quarter of 2019.
However, the recent Covid 19 outbreak has impacted the F&B industry, and MOF has seen a 35 percent drop in performance across the group.
While some branches were still able to get by, eight of them suffered a sharp drop in sales of 80 to 90 percent.
Payments cannot be made
In addition to the effects of the corona virus, banks have reportedly frozen Sims' accounts, including their personal accounts, following Mareva's injunction in February.
Sim said this prevented her from paying landlords and suppliers, and some suppliers had already cut off their ingredients for MOF's kitchens.
She was also interviewed by the Ministry of Labor (MOM) and her passport was confiscated because she did not pay the workers' wages.
Sim added that each closed branch will result in 15 to 20 people losing their jobs, out of around 400 employees across the group.
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Selected image source: Ministry of Nutrition