A Catalist-listed coffee-shop operator being investigated over a controversial purchase of a drinks firm that was later aborted remains open to acquisitions and alliances but will look at developing its own beverage brands, it said yesterday.
Kimly has "convened a work group" to study the packaging of its own iced brewed coffee and tea for sale at its drink stalls.
The firm plans to launch the beverages early next year, it said in a regulatory filing.
It intends to "push ahead" with strategic initiatives, claiming that the arrests of two key executives earlier this month "have not affected the group's daily operations".
Executive chairman Lim Hee Liat and executive director Chia Cher Khiang were arrested earlier this month by the Commercial Affairs Department (CAD) on suspicion of involvement in providing false or misleading statements prohibited under the Securities and Futures Act. The arrests followed a call last month by the Monetary Authority of Singapore and CAD for documents related to the purchase of drinks company Asian Story Corporation (ASC).
Kimly later aborted the purchase of ASC, which had been acquired for $16 million in July from former Pokka Corp employee Wang Chia Ye. Mr Wang was entitled to a hefty earn-out payment that rested on the profitability of ASC. The deal was called off due to Pokka Corp's notice to Kimly on Nov 22 to end its manufacturing agreement with ASC.
The sticky web of relations presented itself as former Pokka International chief executive Ong Eng Sing, also known as Alain Ong, was also Kimly's non-executive director from Feb 15 last year to January this year. Mr Ong, who had been allotted 5.14 million shares in Kimly's initial public offering, is a nephew of Kimly's lead independent director, Mr Ter Kim Cheu.
Kimly also said yesterday that, on average, it has been able to acquire between three and five new food outlet locations each year.
It expects to operate about 70 coffee shops and foodcourts in Singapore by end of the financial year ending Sept 30, 2019. Kimly also plans to grow through a diversification strategy via the acquisition of Japanese restaurant chain Tonkichi and confectionery business Rive Gauche in July this year. Kimly owns and operates three Tonkichi restaurants and 10 Rive Gauche outlets.