Not business as usual at offices of Fu Ji Catering

PUBLISHED : Tuesday, 27 October, 2009, 12:00am
UPDATED : Tuesday, 27 October, 2009, 12:00am

The silence at the two-floor offices of Fu Ji Food and Catering Services Holdings in Shanghai underlines an obvious fact - that the company is in trouble.

Employees at the offices in the city's Pudong district on Friday afternoon were tight-lipped, declining to comment on the liquidation process that Fu Ji would undergo, saying only that none of the firm's top managers were available.

A company official who identified himself only as Li admitted that some operations had closed recently but he declined to give more details.

'I can only tell you that the answer is 'yes' but we can't tell you which operations are closed now,' he said. 'We are busy handling many things at the moment and have no comment for now.'

The company's headquarters were indeed half-empty while there was no signboard bearing the company's name or logo.

After being told that the visitor was from a Hong Kong news organisation, a company official directed this reporter into a small meeting room, closing the door while insisting that Fu Ji had nothing to say for the time being.

The indebted restaurant and catering services company last week applied with the High Court to wind up its operations because it could not repay bondholders.

The High Court has appointed Deloitte Touche Tohmatsu partners Derek Lai Kar-yan, Edmund Yeung Lui-ming and Darach Haughey as provisional liquidators.

Li said there was no way any of Fu Ji's top executives would be available for comment, then rushed out of the room to take a telephone call.

'The management [executives] have their own thoughts but nothing can be made public now,' the company official said when he returned to the meeting room.

'Please leave your contact details and we'll let you know when we have something to say.'

Despite the group's problems, its flagship four-floor restaurant sharing the same building with the headquarters was still open, and diners could be seen entering or leaving the place.

Fu Ji would not rule out debt restructuring to avoid liquidation in the appropriate conditions, a senior company official involved in the winding-up process told the South China Morning Post in a telephone interview.

'Debt restructuring is always the first choice to solve the problem,' said the Shanghai-based official, who preferred not to be identified.

'We would show the creditors our true financial position through Deloitte while studying the possibility of debt restructuring.'

The official said the company would have to talk to bondholders to resolve the issue.

Bondholders who are owed money by Fu Ji are forming an action group to oppose the company going into liquidation.

A shareholders' rights group has urged the Securities and Futures Commission to intervene in the Fu Ji case, saying their entire investments could be wiped out if the company was liquidated.

'We will start communicating with the creditors through the liquidator and brief them on the new situation,' the senior official said. 'Then all parties involved could decide whether a restructuring is possible.'

Asked about whether some of Fu Ji's middle-level managers had resigned, the official said: 'It is true that some people have left. Since the company has various operations across the nation, it's not easy to tell the exact number.'