Otonomos Board Threatens to Take Out the Wrecking Ball and Wipe Out Shareholders

OTONOMOS.COM
Nov 7, 2017 · 6 min read

In a sad but perhaps predictable chronicle of a death foretold, the present Otonomos Board now threatens to wreck the Company by pushing it into receivership by the end of this week.

Last Friday after close of business, pretend CEO Manogaran Thanabalan (“Mano”) sent an undated communication to the shareholders of the Company, within hours of my legal team sending out a Notice of Extraordinary General Meeting to be held on Friday 24 November.

A TRAVESTY OF SHAREHOLDER DEMOCRACY

Mano’s communication alleges that the Company is in a cashflow insolvent position and seeks, inter alia:-

(a) offers for investments in the Company or a sale of the assets thereof; and

(b) an informal meeting of the shareholders on 8 November 2017 at 6pm.

Despite being the majority shareholder of the Company, I was not copied on the communication, but was informed of its contents by another shareholder who is looking to mediate a solution.

Such deliberate exclusion from the communication and thereby from subsequent discussions which directly impact all shareholders, including myself as the majority shareholder of the Company, is manifestly oppressive and there are clear remedies in law that seek to punish such oppression.

It appears that Mano is actively choosing to ignore the requirement under the Company’s Shareholder Agreement that 14 business days’ notice be provided before convening a meeting of the shareholders, whether this is a general meeting or an “informal” meeting.

FROM PROFITABILITY TO INSOLVENCY IN 6 WEEKS

Mano’s panicky plan makes it clear that, if the Company is not able to find a solution at the meeting of 8 November, “the Board will have to exercise its fiduciary duty to the Company and declare insolvency by 1 p.m. on Friday 10 November 2017.”

However, from my recollection of the previous management accounts, there appears to be no reason why the Company ought to be in a cashflow insolvent position at present.

Indeed, up till the point of my purported termination end September, the Company was profitable.

Since, the Board has witheld my access to the Company’s accounts, despite me being a majority shareholder.

Hence, whilst I have no visibility on the financial state of the Company, it is astonishing that the Company could be in such dire straits within the short span of 6 weeks.

Also, the fact that the Company still seems to take orders from clients, despite the possibility of it shutting down at the end of this week, seems suspicious at best, and downright unethical vis-a-vis innocent clients at worst.

HOW THE HIJACKERS CRASHED THE PLANE

The real reason for the alleged cash insolvent position of Otonomos are the actions of the present Board (comprising Mano, Christiaan Kaptein (“Chris”) and Remington Ong (“Rem”)), in breach of their fiduciary and statutory duties, which have resulted in loss and damage suffered by the Company and its shareholders.

Together, they have failed to act bona fide in the interests of the Company.

Over the last six weeks, it appears that the Board and several employees’ attention has been mainly directed towards a spiteful campaign aimed at damaging my personal and business interests, rather than nurturing client relationships or stabilising the product of the Company.

Employees are being misled, with Dymon Asia Ventures at first making promises of supporting the Company financially, only to now actively solicit offers to be bought out before the plane crashes.

Meantime, the rescue campaign in Ether reported in my previous post has been constantly sabotaged, and there is a real risk that as a result of the Board’s DMCA takedown notice, this Medium account will be shut down soon, effectively preventing me from whistleblowing on the actions by the 2 VCs and their puppet CEO who hijacked a prosperous company in full flight.

AN EMPTY THREAT

In any event, the present Board’s threat to “declare insolvency” is empty.

There are laws and rules that circumscribe such process, including a special resolution that has to be passed to wind up a company, without which no members’ voluntary winding up is possible.

Mano indicates the Company has received “unexpected invoices”, however it does not appear to have received statutory demands or have been unable to satisfy such statutory demands within 21 days of service thereof. Thus, no creditors’ winding up appears to be imminent before the date of the Extraordinary General Meeting (EGM), on 24 November 2017.

In fact, it appears that the present Board has threatened to “declare insolvency” so as to stymie my efforts at securing a new investment which would ensure the continued survival and progress of the Company, to be discussed at the EGM.

It should be plain for everybody to see that Mano’s threat is a cynical, disingenuous and destructive means to an end: to apply the wrecking ball to Otonomos so shareholder value is maximally destroyed and the ground is cleared for a distressed bid in receivership, possibly by one of the very VCs that hastened the demise of the Company in the first place.

BOGEYMAN

In this light, Mano’s insinuation in the communication that me preventing access to the Company’s Coinbase account has resulted in its cashflow insolvent position, entitling the Company’s Board to wind-up the Company in the course of this week, is wholly disingenuous and is a below the belt attempt to paint me as the bogeyman.

Since 22 September 2017, I have not had access to the Company’s Coinbase account.

In fact, the Company’s inability to access its Coinbase account is entirely of its own making.

On the very same day of my purported termination, Mano suspended, or instructed an employee of the Company to suspend, my access to my email accounts. This included access to singapore@otonomos.com, which at the time was used to login to the Company’s Coinbase account.

Mano then clumsily seems to have attempted a password reset on the account from an unauthorised device and IP address. This likely resulted in Coinbase activating its “Enhanced Login Protections”.

From investigations by my legal team, such Enhanced Login Protections are customary and from our understanding typically involve, inter alia, renewed identification verification by the authorised account holder.

BITCOIN TO THE RESCUE

Today, my lawyers have written to the Company that I would be willing to assist in regaining access to the Coinbase account, if indeed I can be of help. It is clearly not in any way in my interest to starve the Company of oxygen and reportedly the account now has over USD 300,000 in its wallet, as a result of the nice run-up in Bitcoin over 2017.

However, in order to access the Coinbase account, I would have to:-

(i) log in using the singapore@otonomos.com, access to which Mano hastily cut off on 22 September 2017; and

(ii) log in using a device and IP address which has been verified by Coinbase, i.e. the IP address of the Company’s offices, which Rem with trademark heavy-handedness forbade me from entering after 22 September 2017.

The callous acts described above by Rem and Mano, respectively an ex-banker and an ex-treasurer, neither of whom ever built a business, evince a complete lack of understanding of the manner in which a startup company is run on a day-to-day basis.

Together, they bungled access to one of the Company’s key assets after they unlawfully terminated its Founder. As shareholders we should all hold them to account for their breach of, inter alia, duties of care and diligence which the pair, as directors of the Company, owe to the Company.

A WAY FORWARD

For obvious reasons, I have thus far refrained from unilaterally attempting to commence the recovery procedure for the Coinbase account: in light of the unwarranted vitriol I have been subject to at the hands of the present Board, I wanted to prevent further accusations that I was attempting to access Company funds.

Notwithstanding the above, in an effort to improve the Company’s cash flow, I am prepared to attempt to commence the recovery procedure for the Coinbase account, provided a guarantee is given to me that such attempt is not seen as me trying to access Company funds in an unauthorised manner.

Practically, such recovery process may necessitate access to the the Company’s premises, which is complicated by Mano, with thuggish authoritarianism, making sure me and me family were obliged to leave Singapore within a month of the events of 22 September.

I am entirely aware that unlocking the Coinbase funds may provide the Company with fresh ammunition to continue their frivolous lawsuits and even instigate new ones.

Despite this irony, I am not making my offer to assist with recovering access in any way conditional to the Company dropping its legal action.

I am doing so in the full faith that the shareholders at the EGM end November will recognise the real culprits of this crisis and do the right thing for the Company.

Thanks for your support.

Han

OTONOMOS.COM

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Order companies à la carte online, pay in crypto or fiat. Otonomos is a next-gen company services bureau for the crypto and blockchain economy.

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