As many as 77 ex-employees of troubled Singapore grocery delivery startup Honestbee have filed claims with the Ministry of Manpower, saying their salaries weren’t paid, the Straits Times reported Sunday.
Earlier this month, Honestbee said it laid off around 80 per cent of its staff or roughly 100 employees in the city-state as it came under pressure of a capital crunch amid the ongoing COVID-19 outbreak. The startup said at the time it made a strategic decision to reduce its staff count, particularly in non-core sectors such as its brick-and-mortar grocery store Habitat.
MOM didn’t immediately respond to DealStreetAsia’s request for comment, which was sent outside of office hours.
The company has previously said it would delay paying salaries and Central Provident Fund (CPF) contributions for staff until it obtained further funding, the Straits Times report said. MOM has said salaries for February and the CPF contributions for January and February were delinquent, according to the report.
Employers who don’t pay salaries can be fined up to S$15,000 and/or jailed for up to six months, the report said.
Honestbee is no longer operational regionally. During its heyday, the Singaporean grocery startup was present in multiple markets across Hong Kong, Taiwan, Thailand, Indonesia, Malaysia, Bangkok, Philippines and Japan.
Honestbee is yet to convince investors to put in some much-needed cash. The startup remains under interim court protection as it seeks to pass a scheme of arrangement to restructure itself out of some $230 million of debt. A “retail conglomerate” was reported to have considered injecting some $50 million into Honestbee, but has since stepped back due to the COVID-19 outbreak and restructuring concerns.
In January, Honestbee signed an agreement with multiple existing investors to receive about $7 million in capital to pay off its creditors in a cash and equity deal to clean up its balance sheet. These investors were FLK Holdings, a US incorporated company backed by Brian Koo, Formation Group Fund I, and Formation Group (Cayman) Fund I. Brian Koo is Honestbee’s former chairman and interim chief executive.
All three funds are linked to Koo. He is also Honestbee’s only secured creditor and belongs to the family, which controls South Korea tech giant, LG.
Little is known about the future direction of Honestbee’s Habitat, except that it will follow a quick-service restaurant (QSR) pizza concept and become a tech-enabled convenience store. Honestbee said that plans for this are still in its “very early stages”, with the convenience store focused on fast food service for takeaway. It will also likely tap on Honestbee’s existing technologies in payments and collection. Honestbee’s next court hearing on its restructuring will take place on 26 March 2020.
