Singapore Press Holdings (SPH), which publishes The Straits Times, has applied to wind up an advertising agency, Adcom, following the latter's failure to pay a $1 million judgment ordered by the High Court two months ago.
The move by SPH came after Adcom, which had been given 21 days to pay the judgment debt, failed to do so by the Aug 29 deadline. SPH sued Adcom in March this year after the agency failed to pay about $1 million in advertising fees.
Adcom, set up in 1974, is owned by well-known entrepreneur Adam Khoo and his father Vince Khoo.
In its claim, the publisher contended that the agency had breached an agreement signed by both parties in January 1999, in which SPH agreed to publish advertisements on behalf of Adcom.
Under the written agreement, Adcom, as the advertiser, must make payment no later than 45 days after the date of SPH's invoice for the advertising services.
If any sum remains unpaid after the expiry of the 45 days, all sums owed to SPH become immediately due and payable by Adcom, the agreement states.
The agreement also states that Adcom has to fully indemnify SPH for any liabilities, losses and expenses incurred as a result of any breach of contract by the agency.
Between October 2015 and February this year, SPH issued various invoices to Adcom for advertisements it had published on behalf of the agency. However, Adcom did not pay these sums, totalling $1,005,546.43.
After it was sued by SPH, Adcom filed a counter suit. It contended that SPH had orally agreed not to strictly enforce the terms of the 1999 agreement. Adcom asserted that SPH had breached this alleged oral agreement. It also claimed SPH had contacted clients of Adcom and induced them to breach their contracts with the agency.
On May 31, SPH applied for summary judgment to be granted for its claim for $1 million. This was not opposed by Adcom at the hearing of the application on July 21.
After summary judgment was granted in favour of SPH, Adcom discontinued its counterclaim on Aug 8. On the same day, SPH issued a statutory demand to Adcom to pay the judgment sum as well as interest and legal costs. But no payment was made.
On Sept 13, SPH filed a winding up application against Adcom, on the basis of the agency's inability to pay its debts under the Companies Act.
The winding up application is scheduled to be heard on Oct 7.