Ex-CEO of social media firm Nuffnang loses suit against co-founder

Mr Cheo Ming Shen claimed that he had "no choice" but to resign from Netccentric and that his co-founder had engineered his resignation.
Mr Cheo Ming Shen claimed that he had "no choice" but to resign from Netccentric and that his co-founder had engineered his resignation.PHOTO: NETCCENTRIC

SINGAPORE - The High Court has dismissed a lawsuit brought by the former chief executive officer 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 that 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," said Justice Choo Han Teck, in a judgment released on Friday (Sept 14).

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 that there were three independent directors on the board but they were not called to testify.

One of the social media influencers represented by Nuffnang, prominent blogger Wendy Cheng, who is better known as Xiaxue, testified for Mr Cheo.


Blogger Xiaxue, who testified for former Nuffnang CEO Cheo Ming Shen. PHOTO: TNP FILE

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 company 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 in the letter that the board replace Mr Cheo as CEO to hold him responsible for the company'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, who is represented by Mr Pradeep Pillai and Ms Simren Kaur Sandhu of PRP Law, said there was no proof that a shareholders' meeting was being called .

Said Mr Pillai: "He saw ghosts, he ran as fast as he could and then comes back and says, 'There is a breach of the agreement'."

Mr Cheo's lawyer, Mr Jonathan Yuen of Rajah & Tann, described the case using the analogy of two men driving a car. He compared Mr Tiah to the one who agreed to take the back seat, but goes on to stab the driver and throw him out.

Justice Choo said he could not find any car with two drivers, just as he found there was no agreement between the two men.

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 company's accounts as being owing to him.

The company is claiming more than $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.