- WHITE PAPERS
The statement gave no explanation for Lim's resignation, but the move may be another indication of the company's ongoing financial woes.
A May 15 Ernst & Young audit of the company's financials suggested Inno-Pacific's mounting debts could force it into liquidation. The report said the firm lacked operating capital for itself and its sole subsidiary, Shakey's.
In an effort to raise funds, Inno-Pacific's board of directors of announced in May that it would sell 62.5 million new ordinary shares of its stock for S 1 cent each (about half a cent U.S.) The company has yet to report on the sale's success.
The company has faced other struggles as well. In July, Shakey's and two long-time franchisees negotiated a sealed settlement that ended lawsuits filed against the pizza company in 2001.
While neither Inno-Pacific nor Shakey's representatives have discussed the cost of the litigation, prior to the settlement they blamed those costs for inhibiting Shakey's recent attempts to grow its flagging system.
Since Inno-Pacific bought Shakey's in 1989, the pizza chain's U.S. store numbers have dropped by 300 as longtime franchisees left its system. Many franchisees have accused Inno-Pacific of doing little to advance Shakey's growth in the U.S., and questioned the company's use of their franchise fees. A representative of Jacmar Corp., currently Shakey's largest franchisee with 19 stores, said that company will not renew its franchise agreements when they expire in 2005.
Additionally, in early July, Sean Flynn, Shakey's 13th president in 22 years, resigned. Chin-Yong Wong, managing director and CEO of Inno-Pacific, has assumed Flynn's duties in the near term by stepping in to serve as chairman and CEO of Shakey's.