honestbee sold some assets at discount; S$260k of art in storage

Singapore

DISTRESSED startup honestbee has sold off some of its furniture and goods to its staff, including its management, at a 20 to 30 per cent discount to the purchase price depending on the item, honestbee's chief executive Ong Lay Ann told The Business Times on Monday.

However, he was unable to immediately provide an estimate of how much worth of assets honestbee has liquidated in total. In a follow-up response, an honestbee spokesperson declined to comment on the matter, citing ongoing court proceedings over the company's bid to restructure US$230 million in debt.

Separately, BT understands that honestbee is still holding on to over S$260,000 worth of fine art pieces, including a S$185,000 Zhu Wei sculpture and a Roy Lichtenstein painting said to be worth over S$75,000. Mr Ong confirmed that these artworks are in storage, and cannot be sold at present due to uncertainty over whether the pieces are owned by the company.

Speaking to BT at the Town Club on Monday morning, Mr Ong sought to respond to an article published by tech news outlet Vulcan Post on Friday, which stated that he and other senior executives of honestbee had allegedly been "looting" habitat by "freely taking" goods and not seeming to pay for them. The report had cited sources close to habitat and surveillance footage.

Denying the allegations, Mr Ong said that he had paid about S$15,000 for two single-seater sofas and small tables of "various brands", some of which were from the private dining room in habitat. He added that he received the same 20 per cent to 30 per cent discount as other honestbee staff.

BT understands from sources that furniture in the private dining room included designer furniture such as a Cassina Utrecht chair, which is listed on e-commerce site 2021 for £2,652 (S$4,638), Archibald Poltrona Frau armchairs, which are listed on the site Lomuarredi for £3,158, and Cassina Cab chairs, which retail online on Ambiente Direct for £1,129.

Mr Ong was not able to immediately recall the exact model of furniture he purchased, while the honestbee spokesperson did not respond to a follow-up question by press time.

During the interview, he also told BT said that some of honestbee's assets were sold to third parties, including "a combination of external vendors, friends and family".

But he added: "I don't have the breakdown of who it was sold to ... I actually don't oversee the process at all. Even when I buy the furniture, I ask my secretary to take pictures of what I'm buying, so that it's all properly documented, because we know the optics."

The sale prices were also benchmarked to quotations received from second-hand goods dealer Hock Siong and Co, as well as a liquidation analysis report prepared by honestbee's financial adviser, DHC Capital, he added.

But could such a sale be to the detriment of creditors? Should honestbee be focusing on preserving its assets in case of a liquidation scenario, rather than selling them to its own staff and external parties at a discount?

When asked about these concerns and the impact of the sale on honestbee's restructuring, Mr Ong said: "As long as it's properly done, I don't think anybody can complain that it's not a fair process. I would question if any of the creditors really care that the tables and chairs are sold. I don't think they represent a major or substantial asset of the business."

honestbee is currently "in the process of surrendering" its lease for habitat, at level one of 34 Boon Leat Terrace, to landlord LHN Space Resources, Mr Ong said. The startup cannot afford to rent enough space elsewhere to house all the assets from habitat and hence has to sell off the excess, he said.

"We have been very careful not to sell the tech (and) not to sell the brand, or the various core assets of the business; the more important assets that honestbee needs to continue. Whereas, the physical assets that we are not using, we just sell them off. It makes little sense to keep them," he said.

While Mr Ong is sanguine about selling the startup's assets, creditors of honestbee whom BT spoke to said that they were unaware of the matter before the Vulcan Post report, and are worried about the impact on honestbee's future business potential.

One creditor told BT: "Even if honestbee wanted to sell off its assets, it should have used a bidding process to get the best value. And creditors should also have been given the first chance to purchase these assets ... This really shakes our confidence in the company."

The sale also comes at a time when honestbee is facing other headwinds. Its chief operating officer Varian Lim has resigned and is serving notice till end-March, Mr Ong said. Meanwhile, 77 former employees of honestbee have filed claims with the Ministry of Manpower for non-payment of salaries as at March 11, The Straits Times reported on Monday.

honestbee's next court hearing is set for March 26. If the startup's bid to convene a scheme meeting is denied, it could face liquidation.

Read more: honestbee's art stash includes iconic Lichtenstein painting Bedroom