A*Star says it has no collaboration with Marvelstone Group

SINGAPORE'S Agency for Science, Technology and Research's (A*Star) commercialisation arm, A*ccelerate, told The Business Times there has been no collaboration with fintech group Marvelstone Group, despite an agreement signed with Marvelstone late last year.

In November 2018, A*ccelerate signed memoranda of understanding with five companies, including Marvelstone, to explore the co-creation of startups. The other companies are Startup-O, Hafnium Hafaway, Trendlines and Dymon Asia Ventures.

"A*ccelerate's discussions with a number of these partners are progressing well. However, there has yet to be a collaboration with Marvelstone on any project," an A*Star spokesman told The Business Times (BT) in a response Wednesday night.

BT reported this week that Marvelstone's founder Joe Cho Seunghyun is locked in legal disputes with investors in his home country of South Korea, as well as with Singapore property group Hong Leong Holdings. Marvelstone Group had said the claims by South Korean investors, who are alleging failure to pay contractually promised returns to investors, are "untrue". Despite repeated requests for documents showing Mr Cho's legal defence against these claims, Mr Cho and Marvelstone Group have declined comment, only saying that the group in itself is not a party to these "disputes".

BT found a Facebook group in South Korea with more than 100 members, claiming themselves as "victims" of Mr Cho. Emails from investors and screenshots of Facebook posts reviewed by BT show ongoing investigations by South Korean regulators and lawsuits launched.

Marvelstone Group has also been sued by Singapore's Hong Leong over claims of breaching a licence agreement for the now-defunct Singapore fintech hub, Lattice80. The Singapore property group charged that Mr Cho and the fintech group failed to deposit revenue receipts that should have gone into designated bank accounts.

Hong Leong confirmed to BT that Marvelstone Group had missed the Apr 22 payment deadline for an interim payment demand of S$310,777.38. Hong Leong has further made claims against Marvelstone Group for failing to provide it with specific documents to disclose revenues they had earned in total.

Meanwhile, Singapore Fintech Association (SFA) said Marvelstone is not a member of SFA. An online article in late-2017 had said that Mr Cho - a Singapore permanent resident - was one of the committee members that started the group.

But the SFA told BT this week that Mr Cho is no longer on the board of SFA; neither is the fintech group part of the association.

President of SFA, Chia Hock Lai, told BT by email: "He (Mr Cho) resigned early last year citing personal reasons."

A*Star and SFA joined the Monetary Authority of Singapore (MAS) in clarifying their ties with Marvelstone via queries from BT, as part of BT's investigation into the fintech group.

In 2016, Marvelstone Group opened a "not-for-profit" fintech hub Lattice80 in Singapore, with the group CEO and Singaporean wife of Mr Cho, Gina Heng, saying then that the group had been "working closely with MAS".

But an MAS spokesman told BT that "in line with MAS' support for initiatives that help the growing fintech community, MAS agreed to its request for MAS chairman, then-DPM Tharman Shanmugaratnam, to be the guest-of-honour at the launch of Lattice80. Apart from this, MAS had no other connection with the company".

Separately, UK's Financial Conduct Authority (FCA) told BT that Marvelstone and its related entity Lattice 80 UK are not regulated by FCA. A spokeman said neither company was found on the regulator's Financial Services Register.

In March 2018, Marvelstone's Lattice80 said it would move the Lattice80 global headquarters to London from Singapore. But a check on the UK companies registry shows that a Lattice 80 UK was dissolved on Jan 9, 2019, with the first notice of a compulsory strike-off made in October 2018. The registered address on Google Maps points to a row of mail and courier shops that send out parcels.

In response, Marvelstone told BT that Lattice 80 UK was a "representative office" in London.

Marvelstone Group's unaudited financial documents as at end-2017 showed trade payables totalling S$938,751 that include hundreds of thousands due to a few Singapore-based investors. Its trade payables as at end-2017 were about double its trade receivables.

Marvelstone Group had told BT it did not use any of the funds arising from the investments in South Korea to expand its business in Singapore. As Marvelstone Group said it did not use any of the funds arising from the investments in South Korea to expand its business in Singapore, BT had asked for details behind its funding in Singapore, including the identity of any angel investors. Marvelstone Group declined comment.

BT's checks show that Marvelstone's fund company Marvelstone Capital reported no assets under management from investors over its two years of being a Registered Fund Management Company. It has ceased being a regulated entity.

Marvelstone Group had also previously said that it makes fintech investments, and builds hubs in artificial intelligence and cryptocurrencies. When asked for updates on its plans, Marvelstone Group said: "We are not obliged to disclose our business plans, any changes made to our plans, or the progress of such plans."

Despite the apparent lack of business activity and assets, Marvelstone said Lattice80 is the world's largest fintech hub, and as late as April 2019, said in its newsletter that "the most important IP (intellectual property) we wanted to build was a database". It issues reports on fintech influencers.

Marvelstone Group maintains it is still based in Singapore, and so is Mr Cho, who "travels often". Amid repeated questions from BT, Marvelstone Group has in recent weeks changed its website to a blank page with only its logo on it.

Mr Cho has deleted photos from his Instagram account that used to have his full name as its handle. The Instagram username has been replaced. It now says: @reaching.the.unreached.