honestbee sues its ex-CEO and ex-Director for fiduciary duties breach

Embattled grocery delivery startup honestbee has sought legal action against its former CEO Joel Sng and former Director Jeffrey Wong for breach of fiduciary duties.

Since their departures, honestbee said it has been investigating various transactions done by the company while Sng was CEO and Wong was Director of honestbee. 

honestbee has since discovered numerous irregularities that call for further investigation.

It was discovered that in December 2015, Sng purchased a house in Niseko (Japan) under his name, and the company, on his instructions, paid the purchase price of about US$1.1 million (including acquisition tax), on top of other running costs of the property. 

During the time of the purchase, there was no apparent real benefit or commercial advantage for honestbee to purchase the Niseko house.

In February 2018, Sng attempted belatedly to regularise the Niseko purchase by entering into an agreement with honestbee where Sng indicated that in December 2015 he had been appointed to provide Commissionaire activities by acting on behalf of honestbee in the purchase of the Niseko house, and the company had appointed Sng to purchase and hold the Niseko house. 

The Niseko purchase was not disclosed to the then-Board or shareholders of honestbee until September 2018.

Furthermore, in May 2013, Sng and Wong started a company called The Cub, with Sng owning 70 per cent shares and Wong owning the remaining 30 per cent.

In October 2017, The Cub entered into a tenancy agreement with LHN Space Resources (landlord of habitat by honestbee) for 34 Boon Leat Terrace #02-01 Singapore 119866 and Open Space — the unit above habitat by honestbee.

Also Read: Honestbee to discontinue Singapore food delivery service

honestbee paid for all security deposits and transaction costs (including stamp duty) for the tenancy agreement, and also paid the monthly rent and expenses totalling approximately US$35,000 per month from October 2017 to October 2018, as well as the architectural design fees for the premises, on behalf of The Cub.

Prior to September 2018, Sng did not disclose The Cub payment arrangement to the then Board or shareholders of honestbee. Since October 2017, the tenanted premises were left empty and in fact, were of no real use to honestbee.

In January 2017, Sng incorporated a company called PayNow to ‘develop’ an e-wallet solution on his own account. He was the sole shareholder and director of PayNow.

Upon Sng’s representations that PayNow had a viable product that was ready for launch and that PayNow was worth US$2.7 million as a company, honestbee then entered into a ‘share subscription’ agreement and a ‘partnership’ agreement with PayNow where honestbee subscribed for 20 per cent of the ordinary shares in PayNow, with Sng owning the remaining 80 per cent of the ordinary shares in PayNow. honestbee paid US$700,000 for the ‘share subscription’.

Between August 2017 and February 2018, honestbee paid further sums totalling approximately US$4.4 million for the purported purchase of Sng’s shares in PayNow. These payments were made at Sng’s instructions.

Prior to September 2018, Sng did not disclose any of the transactions to PayNow to the then- Board or the shareholders of honestbee. honestbee has since found that PayNow did not during that time have a minimum viable product that was ready to launch. In fact, the said product that PayNow had produced was only at a rudimentary stage.

honestbee had essentially paid approximately US$5.1 million in total to subscribe and acquire Sng’s 100% shareholding of PayNow. It is believed that the above transactions have caused loss and damage to the Company, and have no doubt contributed to the financial difficulties of honestbee.

The current report said that the company has not received any substantive response from either Sng or Wong. honestbee intends to and will raise and pursue any other questionable transactions that may come to light in the course of its investigations.

MDEC launches a campaign to mitigate COVID-19 impact on the economy

Following the two-week movement control order (MCO) to combat the COVID-19 increasing spread in the country, the Malaysia Digital Economy Corporation (MDEC) has launched the #DigitalvsCovid campaign in an effort to guide local tech companies to extend digital solutions and services to affected domestic businesses and consumers.

Also Read: MDEC partners 9 Digital Transformation Lab for tech enabling support

According to an official statement, the #DigitalvsCovid campaign’s call to serve the nation received encouraging responses, particularly by MDEC’s network of GAIN companies consisting of tech startups and scaleups that are recognised for their tech innovations and sizable business footprint, locally and abroad.

“While large corporations have contingency plans to minimise the impact of COVID-19, many SMEs and micro-enterprises may not be able to tide through this global pandemic. One way forward is through automation and digitalisation,” said Surina Shukri, CEO of MDEC.

Shukri said it only took one attempt to rally Malaysian tech companies to ‘Pay It Forward’ during these trying times. Numerous tech companies within and beyond the GAIN network have expressed their sincere interest to offer their services on a pro-bono basis, either through attractive discounts or strategic collaborations.

MDEC’s #DigitalvsCovid campaign to raise awareness and mitigate against the spread of the Covid-19 threat also launched a series of short videos across its social media channels that encourage a digital approach for businesses to combat COVID-19. 

The campaign will also work with Key Influencers to increase its message penetration, with the first video by Alif Satar already getting over 45,000 views.

Co-living startup Hmlet co-founder Zenos Schmickrath exits the company

Co-founder Zenos Schmickrath has exited Singapore-based co-living startup Hmlet to pursue her next entrepreneurship opportunity, DealStreetAsia has reported.

Schmickrath, however, remains a shareholder of the firm. 

CEO and co-founder Yoan Kamalski remains with the company.

The startup recently switched its business model by adopting a revenue-sharing model with landlords, from directly renting and operating. It allowed the group to lower its operational risk while expanding its portfolio via more mergers and acquisitions.

Kamalski noted the strategic move is significant as it is the best “inflection point” for Schmickrath’s departure. 

“In this regard, we have had to hire a number of professionals over the last two quarters to fuel this shift, while parting ways with a handful of members, including Zenos our co-founder,” Kamalski said.

Japanese trade company Itochu enters into partnership with remote working platform Eko

Trading company Itochu Corporation ahas entered into an agreement with Thailand-headquartered virtual workspace tool Eko Corporation to be its distributor in Japan.

Eko is the virtual workspace tool for remote working that seeks to ensure business continuity for corporations and teams.

Also Read: Indonesia’s SMDV leads US$20M funding round for Thai SaaS platform Eko

Founded in 2012 by Korawad Chearavanont, Eko is a startup corporation founded in 2012, Eko is able to contribute to the revitalisation of in-house communication, improvement of staff engagement and productivity, especially between employees working in stores or at home, as this tool makes a variety of functions possible from a single smartphone, from managing chats, phone calls, and files to creating in-house applications and business reports.

In light of the outbreak of COVID-19 globally, the tool is currently being offered in Japan as a 3-month free trial to support corporations urgently engaged in telework, including working from home, due to the spread of the effects of the coronavirus.

Picture credit: honestbee

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