Sy Phong Bui, the founder and CEO of VC-backed Telio, will have to transfer his shares in the B2B e-commerce platform to investors of OOPA Pte Ltd, the holding company of Bui’s previous venture OnOnPay, a fintech firm that operated in Vietnam.
The Singapore High Court on Wednesday put an end to a two-year dispute between Bui and OOPA’s investors, namely Captii Ventures and Gobi Partners, who accused Bui of setting up Telio without their consent and usurping their business opportunity and rights in Telio.
The Court also ordered Bui to pay a total of S$236,000 ($176,000) for legal costs and disbursements incurred in the lawsuit.
Telio was founded in 2018 on the back of the now-defunct OnOnPay fintech business. The B2B e-commerce startup that operates in Vietnam has raised more than $25 million from investors including Tiger Global, Sequoia Capital, GGV Capital, and RTP Global.
It was established using OnOnPay’s resources including human resources and merchant network, Philip Jeyaretnam, judicial commissioner of the court, wrote in his judgment.
OnOnPay operated top-up services and an e-wallet in Vietnam, but neither of the businesses was successful, according to the judgment.
It was said that Bui and OnOnPay’s investors considered a number of options for a potential exit from the fintech company, which included setting up a new entity operating a central supply business (CSB) — the origin of today’s Telio.
However, the judgment claimed that Bui had incorporated a new company where he was the sole shareholder.
On March 19, 2019, Bui signed a term sheet and a convertible note agreement with Sequoia Capital’s Surge as Telio participated in the accelerator programme. “The other directors of OOPA did not know about Telio’s involvement with Surge until after Surge had made its investment,” Jeyaretnam said.
OOPA was said to have decided on an action plan asserting its rights over Telio, but it could not be resolved. Therefore, OOPA initiated its proceedings on September 6, 2019.
In his defence, Bui was reported to “honestly” believe that he was the owner of Telio, and “openly and honestly negotiated with Captii” about the structuring of the B2B marketplace.
The judgment added that Bui “identifies the villain behind this litigation as Captii, whom he describes as motivated by greed, and abusing this case to exert pressure on him by scaring away other investors with the aim of extracting a benefit from him”.
“I do not accept that Bui acted honestly. I say this because Bui in fact knew that the CSB did not belong to him,” Jeyaretnam affirmed in his judgment.
The 38-page document revealed email and message interactions between Bui and OOPA’s investors that showed OOPA’s ownership of Telio, accusing Bui of usurping “a maturing business opportunity pursued by OOPA and hence breached his fiduciary duties to OOPA”.
“He was its [OOPA’s] largest single shareholder even after dilution, holding 40.15%. I find that contrary to Bui’s allegation that Captii was greedy, it was he who was greedy,” Jeyaretnam said.
He concluded: “Bui as a director of OOPA owed it both loyalty and candour. While the success of the CSB was due in part to his efforts, he was not entitled to move the CSB into Telio and deny that he held Telio on OOPA’s behalf. Having secretly made a deal with new investors, he is accountable for the gain made by him flowing from his breach, and holds his shares in Telio on trust for OOPA.”