The Missing Sugar Mystery
Sakae Holdings, the powerhouse behind the iconic Sakae Sushi chain, has once again found itself tangled in a knot that feels more like a plot twist than an ordinary business hiccup. The latest headline? “The Case of the Missing Sugar.”
AGM Postponement Brought to Fruity Realities
Like a sushi roll that takes too long to prepare, the company’s annual general meeting was pushed back. Now set for October 29, shareholders are probably already asking, “What’s the food for the meeting?”
Financials That Must Have Sweetened the Juice
On August 28, Sakae released a statement covering the year that ended June 30, 2018. That period was unusually long—18 months—because the firm was shifting its fiscal year-end from December to June. In the report, a shadow emerged: an impairment loss of $6.73 million on trade receivables. No explanation—just a straight line on the ledger.
Seven Days Later: The Sweet Truth Revealed
- Early 2017: The company dipped its toes into commodity trading, possibly sugar, through its subsidiary Sakae Capital.
- Four small, under‑$150,000 trades were successfully and profitably shut down.
- July/August 2017: A colossal 12,800‑tonne sugar deal surfaced, pitched to two customers.
- Customer A took 3,457 tonnes and paid $1.6 million in October 2017.
- Customer B took 9,343 tonnes, allegedly worth $4.3 million in December 2017, but—plot twist—never paid.
Shockingly, no red flags lit up on the board until August 27, 2018, when auditors, acting like detective dogs, brought the sugar saga to the audit committee. That committee then—like a page‑turning climax—appointed an independent firm for a deeper probe.
Key Findings That Should Shock Sherlock Holmes
- Customer B’s representatives are now ghosts: no one maps to their contact details.
- A trip to the business premises revealed a no‑business zone.
- The sugar deal’s mediator also vanished from the registered address.
- On September 21, a review report—labeled “highly questionable” by the auditors—was forwarded to the Singapore Exchange, recommending a police file.
- In the aftermath, Sakae Capital reversed the $5.93 million sale and provisioned a full $5.695 million for the missing sugar stock.
Why the Recurrence? A Sweetening History of Oversight
The sugar slip‑up feels eerily familiar. Not for the first time, Sakae Holdings has hammered out a pie‑crushing courtroom battle that reached the apex court over a disastrous property investment. Despite winning, the five‑year ordeal drained management’s bandwidth and highlighted a “systemic abuse” orchestrated by former joint‑venture partner Andy Ong.
Ong, once an independent director (2003‑2013), had secretly siphoned assets from the joint‑venture vehicle. After being ousted, he now faces multiple criminal charges ranging from cheating to corporate breach of trust.
So, why did the company fall head‑first into a classic “foot‑in‑the‑door” scam again? Perhaps comfort with the first lesson has faded, and the temptation of a sweet, easy profit lured committees into complacency.
Diversification: A New Recipe or Another Old Ingredient?
In the last fiscal year, Sakae held a rationalisation blitz, pruning underperforming outlets in Singapore. Yet, restaurant turnovers tell only part of the story. Rising costs—food, labor (the pandemic‑driven shortage), rent, utilities—are brutally escalating.
Amid fierce competition, the group is eager to diversify. But diversification is a two‑step dance: first, you can’t underestimate the competition; second, you can’t let a basic scam slip through the cracks. As the saying goes:
“Fool me once, shame on you; fool me twice, shame on me.”
Only time will determine if Sakae will learn its lesson—or if the sugar mystery will echo through future board meetings.
