Telio founder loses lawsuit, judge finds that he ‘did not act honestly or reasonably’

The Singapore High Court has ordered Sy Phong Bui, founder and CEO of Vietnamese business-to-business ecommerce marketplace Telio, to transfer shares in Telio to his previous company, OnOnPay (OOPA).

The judge also awarded costs worth over S$233,000 (US$174,000) to OOPA. Bui is personally liable to pay the amount as he, not Telio, is named as the defendant.

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

The judge declared that given the evidence, “Bui did not act honestly or reasonably.” Bui is entitled to appeal against the decision in court.

The 38-page verdict was issued on June 16 for a lawsuit that lasted for nearly two years, pitting Bui against OOPA.

The fintech company’s board had accused Bui of breaching his fiduciary duties as its director by usurping its business opportunities and using its resources – including its merchant network, human resources, and intellectual property – to develop his next venture, Telio.

The judge concluded that Bui was not truthful to the former investors in his pursuit of the business idea for Telio. “It was not a matter of his giving the OOPA investors free shares in Telio, but a matter of Telio belonging to OOPA,” he wrote.

Bui had sought the approval of OOPA board members to set up Telio as a new entity, the judge added. Bui also proposed that OOPA investors would own shares in Telio. He then reached out to potential investors for Telio and “referred to and relied on the track record” that his new venture was a business undertaken by OOPA.

However, OOPA investors were kept in the dark during the fundraising process. “While Bui was evasive in his answers during cross-examination, he did accept that he did not inform OOPA about his discussions with Surge or that Telio had entered into the investment agreement with Surge on 19 March 2019,” the judge wrote. Surge is the accelerator arm of venture capital firm Sequoia India.

Because Bui “secretly made a deal with new investors, he is accountable for the gain made by him flowing from his breach,” the judge pointed out.

He then ruled that OOPA is entitled to Bui’s Telio shares, as the entrepreneur was found to be holding them “on trust for OOPA.”

A startup with prominent investors

The legal dispute was first chronicled by Tech in Asia in July 2020. Sai Kit Ng, Captii Ventures’ Southeast Asia head, said in a previous email that the legal action was meant to “protect the company’s (OOPA) interests and ultimately those of its creditors and shareholders.”

Ng is a director at OOPA since Captii Ventures had funded the startup in two rounds. OOPA investors demanded 100% of the shares in Telio’s Singapore entity, according to a January 2020 court document.

In 2019, Telio bagged US$25 million in a series A round led by Tiger Global Management, with participation from Sequoia India, GGV Capital, and RTP Global. The B2B ecommerce startup’s valuation soared and reportedly surpassed US$100 million following the capital injection.