Telio founder is accused of breaching fiduciary duty by his previous startup. He denies the claims

Terence Lee and Thu Huong Le co-reported for this story.

Sy Phong Bui, founder and CEO of Telio, a business-to-business ecommerce marketplace in Vietnam that enables small retailers to procure goods from its web and mobile apps, is embroiled in an ongoing legal dispute with his former startup, according to two sources familiar with the matter and several internal documents seen by Tech in Asia.

The year-long legal spat pits Bui against his previous startup, OnOnPay. The fintech company’s board has accused him of breaching his fiduciary duties as its director by usurping its business opportunities and using its resources to develop Telio.

Sy Phong Bui attended Tech in Asia’s startup contest in Singapore in 2015 / Photo credit: Tech in Asia

At the same time, Bui did not grant OnOnPay’s investors shares in the new startup despite supposedly saying that he would do so.

Bui’s lawyers have denied OnOnPay’s allegations, adding that it has no legal basis to claim any share in Telio.

“I am compliant with applicable laws,” said Bui in an email statement to Tech in Asia. However, he declined to comment on specific details as the lawsuit is ongoing.

Telio’s complicated birth

On his Linkedin profile, Bui indicated that he had left OnOnPay in November 2018. But before that, he attended Alibaba’s eFounders Fellowship and drew inspiration for Telio at that leadership program.

In January 2019, Telio’s legal entity was set up in Singapore, according to a public filing, and it quickly became one of the most prominent young startups from Vietnam.

But OnOnPay’s directors insist that there wasn’t a clean break between his two stints. They claim to have consented to Telio’s development using OnOnPay’s resources, including its “employees, technology, know-how” as well as database of customers and merchants. Telio’s trial run was conducted on OnOnPay’s website.

The directors cited an expense report for OnOnPay sent by the chief operating officer, noting that the company had started to “run the wholesale reseller [business] since November 2018, which incurred the promotion cost to motivate merchants to use the product.”

Around the time Bui set up the new entity, he explained to OnOnPay’s shareholders that its purpose was to help him fundraise for Telio since the valuation for OnOnPay had “caused hesitation for the round to be closed,” Bui wrote in an email seen by Tech in Asia.

He envisioned that the new company would “empower 1.5 million mom and pop shops in Vietnam” and said that Telio had been launched in the “recent” 1.5 months. “The new entity’s cap table shall fully reflect OnOnPay’s current one, with a lower valuation as the investment into Telio is considered as seed funding,” he added.

Those shares never came, according to internal documents seen by us.

The next hot ticket

Bui’s rebuttal and settlement offer

Preferred outcome