Home Coffee shop Ex-chairman and director of cafe chain Kimly fined for failing to disclose his stake in company acquisition

Ex-chairman and director of cafe chain Kimly fined for failing to disclose his stake in company acquisition


SINGAPORE: The former executive chairman and director of Kimly, one of Singapore’s largest traditional cafe operators, was fined by a court on Wednesday (February 16) for failing to disclose that its chairman held a 30% stake % in a company that Kimly was acquiring.

Lim Hee Liat, 56, then executive chairman of the listed Catalist company, was fined S$150,000. Kimly’s manager at the time, Vincent Chia Cher Khiang, 47, was fined S$100,000 for his involvement. They were both disqualified from acting as directors for five years.

Both men paid their fines in full on Wednesday.

They pleaded guilty to one count each of intentionally failing to inform the Singapore Stock Exchange (SGX) that Kimly’s acquisition of Asian Story Corporation (ASC) was a “interested person transaction”, as SGX Catalist Listing Rules require it. Lim had a second charge considered.

The court heard that Kimly was at the time one of Singapore’s largest traditional coffeehouse operators, with subsidiaries operating restaurants and confectioneries.

Kimly was first incorporated in Singapore as a limited company in May 2016 and listed on the Catalist Board of SGX in March 2017.

At the time of the breaches in 2018, Lim was the executive chairman of Kimly’s board and a founding shareholder. He owned approximately 42% of Kimly’s shares and oversaw the development and overall performance of the group.

This included setting and executing strategic directions, planning for expansion and seeking investment opportunities to promote business growth.

Chia was a member of the board of directors as the company’s executive director. He was responsible for developing strategies and implementing group process improvements and assisted Lim. Chia was also responsible for listing compliance matters after Kimly listed on SGX, including ensuring the company complied with all relevant listing rules.


Asian Story Corporation was incorporated in December 2009 and was in the business of supplying and distributing traditional Asian beverages such as chrysanthemum tea and soy beverages.

The company’s beneficial shareholders were Amos Wang Chia Ye, Chin Gim Wah and Alain Ong Eng Sing, the former chief executive of beverage company Pokka International. At the time of incorporation of ASC, Wang legally owned 100% of the shares of the company.

Around 2009 or 2010, Ong and Wang approached Kimly’s Lim asking her to invest in ASC. In 2010, Lim invested around S$300,000 in ASC, but was never involved in its operations or management.

After Lim’s investment, the beneficial ownership of ASC shares was allocated as such: 30% for Lim, 40% for Ong, 15% for Wang and 15% for Chin.

As of 2009, Chia knew Lim had invested S$300,000 in ASC and beneficially owned 30%. In 2017, Lim also personally told Chia that he owned 30% of ASC shares.

Chia believed that Lim did not want to hold ASC’s shares in his own name or act as a director of ASC because Lim was concerned that Kimly’s competitors would buy ASC’s products if that were the case.

On July 2, 2018, Kimly announced that it had acquired all of the shared and fully paid ordinary shares in the capital of ASC for consideration of S$16 million, paid by Kimly to Wang in cash.


This was after a valuation report was written for ASC and after the proposed acquisition was approved by Kimly’s board in May 2018.

At two board meetings, Lim did not disclose that he had a beneficial interest in ASC. Nor did he disclose this to the board of directors at the time the directors’ resolution was passed in writing to approve entering into a sale and purchase agreement with Wang for the acquisition of ASC.

Chia also knew that Lim’s ownership of ASC meant that the acquisition had to be reported as an interested person transaction – a transaction between a risky entity and an interested person.

However, he chose not to disclose it for several reasons. He said he was concerned about Lim’s credibility and perceived integrity with his long-term partners, who were also partners of Kimly, as this “old guard” had a culture of bringing deals to the table. to share with each other, but Lim hadn’t let them know of his interest in CSA.

Chia also felt that the “window of opportunity” to disclose the transaction was missed during Kimly’s IPO or initial discussions of acquiring ASC.

Chia knew that Ong and Chin had interests in ASC, as Lim had told her. He was concerned about Ong and Chin’s employment by Pokka, as he feared that if Lim’s interest in ASC was disclosed, Ong and Chin’s interest in ASC would also be disclosed.

Chia was also concerned that this would affect plans at the time for Ong to succeed Lim and become CEO of Kimly.

The deal was ultimately canceled following Pokka Corp’s notice to Kimly in November 2018 to end its manufacturing deal with ASC.

When questioned by investigators from the Department of Commercial Affairs, Lim suggested that it was possible that he had not disclosed his interest in ASC, because if he did, it could lead to questions about the ownership of the 70% remaining shares of ASC.

Lim’s ultimate intention at the time was to consolidate all activities together, including ASC activities, under Kimly to “create an ecosystem that was good for Kimly’s overall business”.

Prosecutors sought a S$150,000 fine for Lim, a S$100,000 fine for Chia and the required five-year disqualification from acting as a director of any company for both.


Deputy Attorney General Suhas Malhotra said the case involves “an intentional and blatant refusal to comply with disclosure obligations that apply to all listed companies in Singapore”.

He said the breaches “strike at the heart of the disclosure-based corporate governance regime that underpins the entire securities market.”

Regarding Lim’s conduct, Mr Malhotra said it was “a shameless choice by Lim not to disclose his interest in CSA, in violation of the law”.

“That the executive chairman of a public company could treat his company’s obligations in such a cavalier manner is troubling, to say the least,” he said.

He urged the court to impose the fine sought to remind not only the defendants but all other directors of publicly traded companies of the need to treat their companies’ obligations seriously.

Lim was defended by a team of lawyers led by lead attorney Davinder Singh, who accepted the S$150,000 fine. Chia was represented by Mr. Terence Tan Li-Chern.

Ong, whose actress wife Vivian Lai appeared in Pokka adverts, faces charges under the Societies Act and is due back in court for a pre-trial next month.