Local chain restaurant PappaRich has been ordered by the High Court of Malaya to wind up its business. It is said the restaurant chain in Malaysia has unpaid debts of RM37.22 million.
Mid last year, a winding-up petition was filed against Papparich Group Sdn Bhd (PGSB). The petition was filed twice by one of the company’s shareholders, Chen Kaiwen and AgathisFour on 15th and 22nd May 2020. Almost a year later, on 5th May 2021, the company received a winding-up order from the Malayan High Court.
According to court documents, PGSB, Agathisfour and Papparich Malaysia had in May 2014 entered into an agreement for Agathisfour to acquire 4.47 million shares in Papparich Malaysia for RM24 million and another 325,303 new shares in the company for RM6 million.
Under the agreement, PGSB was obligated to settle in full amounts owing (non-trade) to Papparich Malaysia within 36 months from the date of the agreement, as well as amounts owing to RRI by October 2015.
However, the settlement date for the amount owing to RRI was later extended to May 2017. PGSB was accused of failing to fully settle or cause to be settled the balance amount owning, totalling RM37.22 million.
According to PGSB’s partner, ST Group Food, its board of directors do not expect the winding-up application to affect PGSB’s business and operations. They also disclosed that the company will be extracting court judgements to obtain detailed information about the order. However, ST Group Food did warn shareholders and potential investors to be cautious.
According to the public notice, the Winding-Up Petition was directed to be heard before the High Court of Malaya at 9 AM on 11 August 2021. The public notice also called for any party looking to support or oppose the Petition for the Winding-Up of Papparich Malaysia to appear for the hearing.
Papparich opened its first store in 2006 and currently has 55 active stores in the country. Meanwhile, ST Group Food Industries Holdings holds the franchise to operate Papparich stores abroad. As of August 2019, it operated a total of 35 outlets, including in Australia.
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