Under Construction

Source: Thailand Startup News  Sep 24, 2019

Honestbee In More Problems As It Owes More Than US$1 million To Unpaid Staff

Honestbee In More Problems As It Owes More Than US$1 million To Unpaid Staff
Source: Thailand Startup News  Sep 24, 2019
Singapore-based grocery delivery startup is now in more financial problems as well as legal problems as it has come to light that it owes 217 employees a total of almost USD $1 million in unpaid salary.

The figure was revealed in an affidavit filed in the Singapore courts last week by Honestbee CEO Ong Lay Ann as part of the startup’s debt moratorium application.

The Singaporean Ministry of Manpower has indicated that 45 employees have filed claims with the Tripartite Alliance for Dispute Management, with some of the employees settling mediation by agreeing to a payment schedule with Honestbee that will be monitored by the alliance.

An Honestbee spokesperson said, “There is a communicated salary delay for Honestbee’s ex-employees and employees currently serving notice. While there are regular injections of working capital, the amount remains insufficient for all headcount. As a result, the company has made the difficult decision to prioritize existing staff in Singapore. The company has the full intention in meeting its obligations to staff and will be, if not already in active discussions with staff in relation to a feasible payment schedule.”

It was already reported in April that Honestbee was running out of money and trying to find a buyer. The company, which used to operate in eight markets across Asia, has closed operations in Hong Kong and Indonesia, temporarily halted services in Japan and the Philippines and suspended its food delivery service in Thailand.

Status of its Thai Staff are unknown but many are saying that they do did not get paid. The affidavit filed by Ong says Honestbee currently has 192 employees, down from 528 full-time employees and 79 part-time workers in January 2019.

Honestbee chairman Brian Koo resigned from the board on on Sept. 12 2019.

According to the affidavit, Koo and associates including investment vehicles he set up, are owed about $258 million, or about 90% of Honestbee’s debt. Koo, a founding managing partner of venture capital firm Formation Group, was one of Honestbee’s earliest investors and served as interim CEO from May to July after CEO Joel Sng stepped down.

The company is currently struggling with lots of financial issues. Only 12 months ago, many media and startup agencies in South East Asia was hailing it as a successful startup and the founders were poster boys plastered in many startup events. Even some of its senior staff at its Thai operations were looked upon as startup ‘gurus’ despite the reality that the whole company was so badly managed and that there was no actually profitability. Some of these Thai staff are now in startup advisory roles!