#Asia Ousted Otonomos CEO says he’s going after board members in court

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Judge's gavel - court

Photo credit: Brian Turner.

Otonomos founder and CEO Han Verstraete has penned a new blog post on the continuing saga of his blockchain company.

In the post, Verstraete says he is commencing legal action against the three board members – Dymon Asia Ventures principal Christiaan Kaptein and Fenbushi Capital partner Remington Ong, and Otonomos CTO Manogaran Thanabalan – who he alleges conspired to remove him from his position. Previously, he had only referred to Thanabalan by name.

Verstraete tells Tech in Asia that he had no differences with Thanabalan beyond what every startup team faces, but that Thanabalan was under a lot of pressure to create a quality dashboard for Otonomos’ clients. Otonomos uses blockchain technology to help companies incorporate and use smart contract capabilities through its online service.

See: Blockchain startup CEO claims he’s being ousted from his company

The former CEO says he’s now taking Kaptein, Ong, and Thanabalan to court while also starting a “parallel arbitration procedure” soon, as per the shareholders’ agreement. In the meantime, he tells Tech in Asia that an extraordinary general meeting – an unscheduled meeting of a company’s shareholders to decide on an urgent matter – is slated for mid-November to try and resolve the situation sooner.

The individual members of the board did not comment to Tech in Asia, pointing us instead to an Otonomos statement signed by Thanabalan. In the statement, Thanabalan denies that Kaptein, Ong, and himself have been served any court papers on the allegations mentioned in the post.

“If the allegation [sic] in the blog post have indeed been made in Court proceedings, the individuals and/or entities named therein are ready, willing and able to defend themselves. But until such time Court proceedings are afoot and/or the papers served therefor [sic], it is premature and irresponsible to found a response based on the allegations contained in a blog post which you attribute to Mr Han Verstraete,” the statement says.

The company has instructed its solicitors to determine if there are in fact legal proceedings underway, the statement continues. “In the meantime, the Company intends to vigorously protect its goodwill and reputation and maintain proper governance in light of the developing events and will not hesitate to prosecute to the fullest extent permitted by law any loss and damage improperly caused to the Company.”

Tech in Asia has confirmed with Verstraete that he is indeed the author of the blog post. Verstraete further states that a claim has been lodged at court and that his side is waiting to hear from the company’s lawyers that they can be served notice on their clients’ behalf. Verstraete’s side will serve notice directly on Monday if they don’t hear from them by then.

Allegations

Verstraete makes a number of serious allegations in this latest update, including:

  • Claiming that Dymon Asia Ventures attempted to buy off Startupbootcamp Fintech’s stake in Otonomos at a valuation of around US$5 million. He says that as a board member at the time, Kaptein had insider knowledge that Otonomos was in talks about raising a series A round worth US$6 million at a proposed pre-money valuation of US$50 million. According to Verstraete, Startupbootcamp holds a 5.37 percent stake in Otonomos, while Dymon owns 3.51 percent, having invested US$300,000 in the company.
  • Alleging that Dymon Asia Ventures falsely told him they were invested in by Temasek, Singapore’s sovereign fund.
  • Saying that the above-mentioned board members installed Thanabalan as interim CEO with the promise of more shares. Also, that they offered additional “bridge financing” at the company’s seed round valuation to gain more equity in Otonomos, and that they promised increased stakes to employees to get them on their side.
  • Alleging that Thanabalan cancelled Verstraete’s employment pass and his family’s dependant passes, thus making it difficult for them to remain in Singapore legally.
  • Saying that Dymon removed the CEO of its portfolio company 4XLabs, Julien Labruyere, in a similar fashion.
  • Claiming that Dymon had trouble closing its fund and needed Otonomos as a poster child to reach an initial close of US$25 million.
Otonomos founder Han Verstraete

Otonomos founder Han Verstraete. Photo credit: Otonomos.

In the blog post, Verstraete adds that he will be starting an Ethereum crowdfunding campaign to help fund litigation proceedings and that he intends to share more updates through his Medium page.

Startupbootcamp declined to comment.

In March this year, TechCrunch reported that Dymon was targeting a US$50 million fund aimed at fintech companies.

This post Ousted Otonomos CEO says he’s going after board members in court appeared first on Tech in Asia.

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