The Singapore Tourism Board (STB) plans to suspend the licence of Asiatravel.com Holdings for six months, and has given the Singapore-listed travel company until July 27 to show cause against the notice.
A notice of intent to suspend the group was issued to Asiatravel last Friday, under the Travel Agents Act, the Catalist-listed company disclosed in an exchange filing yesterday.
The STB said this was done in the public interest after independent auditor Ernst & Young made a disclaimer of opinion on whether Asiatravel could continue as a going concern. It also noted Asiatravel's inability to fulfil certain outstanding obligations.
Asiatravel had suspended trading in its shares a week prior, on July 6, following queries from creditors, suppliers and stakeholders on its financial position. Controlling shareholder Zhonghong Holding Co missed a scheduled funding payment of $7.35 million in end-June - a payment that the loss-making company later said was "critical to the group's continuing operations and payment of its debt".
The board of directors - one of whom has left - said in yesterday's statement that the company believes the notice will not have an impact on its operations.
It is now seeking legal advice "and will, in consultation with its lawyers, take all necessary steps and measures to vigorously show cause against the notice".
It added that it is working in the meantime to make good on all its obligations to consumers and industry partners. This includes ensuring that customer bookings are not affected, and that customers are made aware of the suspension notice as required by the authorities.
Separately, Asiatravel announced the resignation of non-executive director Wang Yongli, a member of the nomination and remuneration committees.
Mr Wang, 48, was appointed to the post in March last year and stepped down on Monday "to pursue his own interest", according to the company. Asiatravel's Catalist sponsor, RHT Capital, said in the announcement that it was satisfied there were no other material reasons for Mr Wang's departure.