Court dismisses ex-CEO's lawsuit over 'betrayal'

Former Netccentric CEO Cheo Ming Shen claimed his co-founder "engineered" his resignation and thus breached an agreement not to interfere with his leadership. But his contentions cut no ice with the court.
Former Netccentric CEO Cheo Ming Shen claimed his co-founder "engineered" his resignation and thus breached an agreement not to interfere with his leadership. But his contentions cut no ice with the court.PHOTO: NETCCENTRIC

The High Court has dismissed a lawsuit brought by the former chief executive officer (CEO) of a social media company who accused his co-founder of "betrayal".

Mr Cheo Ming Shen, 35, claimed that he had "no choice" but to resign from Netccentric, the parent company of blog advertising network Nuffnang, in January last year amid bad financial results.

Mr Cheo claimed his co-founder, Mr Timothy Tiah Ewe Tiam, 34, a Malaysian, had "engineered" his resignation and thus breached an agreement not to interfere with his leadership of the company.

But Mr Cheo's contentions cut no ice with the court. "The plaintiff jumped without being pushed," Justice Choo Han Teck said in a judgment released on Friday.

The judge found that there was no evidence to support Mr Cheo's claim that Mr Tiah had agreed to let him remain as Netccentric's CEO for three years. Justice Choo noted there were three independent directors on the board but they were not called to testify.

One of the influencers represented by Nuffnang, blogger Wendy Cheng, better known as Xiaxue, testified for Mr Cheo. But the judge found her evidence "largely not relevant to the issues before the court, and therefore, had no impact on the outcome of this case".

Mr Cheo and Mr Tiah started Netccentric in 2006. Losses mounted after the firm was listed on the Australian Securities Exchange in July 2015, and a rift between them grew.

 

"With two young, ambitious men in a very modern business dealing in public influence... it was only a matter of time before one of them (the defendant) declares that 'one mountain cannot have two tigers' and the other (the plaintiff) promptly saying 'I agree'," Justice Choo wrote in his judgment.

The judge was referring to an exchange of text messages between the two men in September 2016, in which Mr Tiah offered to step down as chief operating officer.

Not long after Mr Tiah resigned and received a large severance package, the board received a letter from Malaysian tycoon Tony Tiah Thee Kian, an investor in Netccentric and Mr Tiah's uncle. The tycoon demanded the board replace Mr Cheo as CEO to hold him responsible for the firm's "deplorable performance".

In his lawsuit, Mr Cheo said he resigned to save himself the embarrassment of being voted out in a shareholders' meeting. Mr Tiah said there was no proof that a shareholders' meeting was being called.

Separately, Mr Cheo and Netccentric have sued each other. In June, Mr Cheo won his claim for sums totalling about $250,000 that were recorded in the firm's accounts as being owed to him. The firm is claiming over $100,000 from him, including expenses for personal trips and a monthly "petrol and parking"allowance of $3,000 for 19 months. The case is pending.

A version of this article appeared in the print edition of The Straits Times on September 18, 2018, with the headline 'Court dismisses ex-CEO's lawsuit over 'betrayal''. Print Edition | Subscribe