Honestbee, the ailing Singapore-based delivery startup, said it has sought legal advice and taken action against its former chief executive officer Joel Sng and former director Jeffrey Wong for alleged breach of fiduciary duties.
In a statement, the startup said it has been investigating various transactions entered into by the company while Sng was CEO and Wong was director of Honestbee.
“Honestbee has since discovered numerous irregularities that call for further investigations,” the company said.
The investigations came as Honestbee is no longer operating regionally, a total turnaround from its heyday when it was present in multiple markets across Hong Kong, Taiwan, Thailand, Indonesia, Malaysia, Bangkok, Philippines, and Japan.
Some irregularities the company found were the purchase of a house in Niseko, Japan, the tenancy of The Cub SG, and the transaction involving e-wallet solution PayNow Pte Ltd.
Honestbee said it discovered that Sng purchased a house in Niseko, Japan under his name, and the company, on his instructions, paid the purchase price of about $1.1 million, on top of other running costs of the property.
“During the time of purchase, there was no apparent real benefit or commercial advantage for Honestbee to purchase the Niseko house and make the payment on behalf of Sng for it,” the ailing startup said.
The purchase was not disclosed to the then-board or shareholders of Honestbee until September 2018.
In May 2013, Sng and Wong started a company called The Cub SG Pte Ltd (The Cub), with Sng
owning 70 percent shares and Wong owning the remaining 30 percent.
In October 2017, The Cub entered into a tenancy agreement with LHN Space Resources Pte. Ltd. (landlord of habitat by Honestbee) for 34 Boon Leat Terrace #02-01 Singapore 119866 and Open Space – the unit above habitat by the startup.
Honestbee paid for all security deposits and transaction costs (including stamp duty) for the tenancy agreement, and also paid the monthly rent and expenses totaling approximately S$51,000 per month from October 2017 to October 2018, as well as the architectural design fees for the premises, on behalf of The Cub.
Since October 2017, the tenanted premises were left empty and, in fact, were of no real use to Honestbee.
“There was no real benefit or commercial advantage for the company to make payment of the tenancy transaction expenses and rent, as well as any other fees or payments for the premises, on behalf of The Cub,” according to Honestbee.
Additionally, the startup’s investigation also found that its dealings with PayNow, an e-wallet solution started by Sng, was not beneficial to Honestbee.
Honestbee entered into a ‘share subscription’ agreement and a ‘partnership’ agreement with PayNow where Honestbee subscribed for 20 percent of the ordinary shares in PayNow, with Sng owning the remaining 80 percent. This, after Sng said PayNow had a viable product and was already worth S$4 million.
“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,” it added.
The transactions involving Sng and Wong have caused loss and damage to the company and have no doubt contributed to the financial difficulties of Honestbee, it alleged.
The company has not received response from Sng or Wong, and it intends to continue investigating any other questionable transactions that may come too light.