Honestbee announced today (March 24) that it has taken legal action against ex-CEO Joel Sng and ex-director Jeffrey Wong through letters of formal notice for breach of fiduciary duties.
Since leaving, Honestbee has initiated an investigation into various transactions the company had completed while Sng and Wong were still Honestbee's CEO and Director.
Since then, honesty has discovered numerous irregularities that require further investigation:
1. Property in Niseko, Japan
It was found that Sng had bought a house in Niseko, Japan under his name in December 2015, and that the company, at his direction, had paid the purchase price of approximately $ 1.1 million (including acquisition tax) in addition to other ongoing charges of property.
During the purchase, there was no obvious or commercial advantage for Honbebee to buy the Niseko house and pay for it on Sng's behalf.
In February 2018, Sng delayed trying to regulate the purchase of Niseko by entering into an agreement with Honestbee – with Sng indicating that he was appointed in December 2015 to carry out commissionaire activities by acting on Honestbee's behalf when he purchased the Niseko-Haus acted – and the company had commissioned Sng to buy and hold the Niseko-Haus.
The purchase of Niseko was only communicated to the then board of directors or the Ehrlichbee shareholders in September 2018.
2. Lease at 34 Boon Leat Terrace # 02-01 and Open Space
In May 2013, Sng and Wong founded a company called The Cub SG Pte Ltd (The Cub), with Sng holding 70% of the shares and Wong the remaining 30%.
In October 2017, The Cub signed a lease with LHN Space Resources Pte. Ltd. Ltd. (Landlord of the Honestbee Habitat) for 34 Boon Leat Terrace # 02-01 and Open Space – the unit above the Honbebee Habitat.
Honestbee paid all security and transaction costs (including stamp duty) for the rental agreement, as well as the monthly rent and monthly costs of approximately S $ 51,000 per month from October 2017 to October 2018, as well as the fees for the architectural design of the premises on behalf of The Cub.
Prior to September 2018, Sng did not announce the Cub payment agreement to the then board
or shareholders of honesty.
The rented premises had been empty since October 2017 and were not really useful for honesty.
There was no real or economic benefit to the company to pay the rental transaction costs and rent, or any other fees or payments for the premises on behalf of The Cub.
3. E-wallet solution (PayNow Pte Ltd)
In January 2017, Sng founded a company called PayNow Pte. Ltd (PayNow) to “develop” an e-wallet solution for its own account. He was the sole shareholder and director of PayNow.
After Sng's assurances that PayNow had a functional product that was ready for launch and that PayNow as a company was worth S $ 4 million, honest contracts with PayNow entered into an agreement to subscribe for shares and an agreement Partnerships in which an honest 20 subscribers have subscribed to% of PayNow common stock, with Sng owning the remaining 80% of PayNow common stock.
Honestbee paid S $ 1 million for the “share subscription”.
Between August 2017 and February 2018, Honbebee paid additional amounts totaling approximately
S $ 6.4 million for the alleged purchase of Sngs shares in PayNow. These payments were
manufactured on instruction from Sng.
Prior to September 2018, Sng did not forward any of the transactions to PayNow to the then board or Ehrlichbee shareholders.
Honestbee has since determined that PayNow did not have a minimal viability product that was ready for launch during this time. In fact, the product produced by PayNow was only in a rudimentary stage.
Honestbee essentially paid a total of approximately S $ 7.4 million to subscribe and acquire Sng's 100% stake in PayNow.
Honestbee is waiting for a reply from Sng, Wong
The above transactions are believed to have caused loss and damage to the company
have undoubtedly contributed to the financial difficulties of honesty.
The violations described above are not exhaustive and are based on the company's ongoing internal investigations.
According to Ehrlichbee, the letters of formal notice were issued on March 9 and are currently waiting for a substantial response from Sng or Wong.
Honestbee intends and will raise and pursue other questionable transactions that may come to light in the course of its investigations.
Selected image source: Ivan Teh – Running Man