Troubled grocery startup Honestbee has served its former bosses with letters of demand for possible breach of fiduciary duties after detecting shady transactions entered by the company while they were at the helm.
In a media advisory yesterday, the company said it is taking legal action against Joel Sng and Jeffrey Wong, the company’s former CEO and director, respectively, after discovering “irregularities” in company transactions including the purchase of a home in Japan, millions invested in one of their other companies, and tenancy for an office unrelated to Honestbee.
“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 breaches outlined above are non-exhaustive and based on the company’s ongoing internal investigations to-date,” Honestbee wrote.
None of the transactions were disclosed to the company’s board of directors until September 2018.
Honestbee has been running out of money, multiple outlets reported early last year, around the same time Sng resigned from the company, food delivery services were suspended, and 10% of its workforce laid off.
The company is now led by a man named Ong Lay Ann.
In yesterday’s advisory, Honestbee said neither Sng nor Wong has responded to a company probe. It also intends to “raise and pursue” other questionable transactions that may surface in the course of its investigations.
According to transaction details disclosed by the company, Sng had apparently purchased a residence worth US$1.1 million in Niseko, Japan in December 2015.
Both Sng and Wong also rented an office for a separate company they had set up called The Cub SG. Honestbee had paid S$51,000 in total monthly expenses for a year from October 2017 to 2018. Expenses included rent, security deposits, as well as architectural design fees.
Honestbee had also purchased S$7.4 million worth of shares for the PayNow e-wallet platform established by Sng in January 2017 and now widely used by Singaporeans.
When Honestbee subscribed to the shares and entered into a partnership agreement with PayNow, Sng had reportedly presented the e-wallet platform as a “viable product” that was ready to be launched. He also allegedly said that the company behind the platform, which he was a director of, was 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,” the company said.