Eight months into their launch, they raised over S$60 million in what was considered “one of the largest series B rounds on record in Southeast Asia”.
Singaporeans enjoyed a blissful period of having multiple bike-sharing options….until oBike’s sudden closure.
o-No, Here Comes Trouble
Here’s a quick timeline of oBike’s troubles from June 2018:
$49 deposits secretly siphoned away as payment for 1095-day Super VIP (SVIP) Membership subscriptionBlamed gratuitous SVIP conversion to a “technical lapse”, promises refundAnnounced that they were ceasing operations but bikes were still available to ride via the GrabCycle platformBlamed Singapore’s Land Transport Authority (LTA) for “new regulation measures [that] do not favour [their beliefs].”Suddenly vacates Singapore office; oBike went into liquidationLTA ordered company to remove all of their 14,000 bicyclesAs of 28 June 2018, the Consumer Association of Singapore (CASE) revealed there were 772 complaints against oBike
At time of writing in June 2018, oBike recorded a loss of about S$4.25 million and had S$22.7 million in liabilities at the end of 2017.
In the initial report by Channel NewsAsia (CNA) last year, senior managing director of FTI Consulting Joshua Taylor said that oBike Singapore users have filed claims worth “hundreds of thousands of dollars”.
According to FTI Consulting, the bicycle-sharing company had collected S$12 million from Singapore users, of which S$10 million had been transferred to oBike’s Hong Kong office just before it was shut down.
When oBike’s Hong Kong office offered to pay it off, FTI Consulting “rejected it” because the amount would be short of the S$8.9 million in total owed to Singapore users.
New Year, Old Debt
Their identities were revealed to be Oscar Moises Chaves, and his younger brother, Samuel Chaves, who are also the owners of oBike Hong Kong.
However, the brothers have expressed that their intentions have been met with an “impasse” as FTI Consulting is unable to provide a “full breakdown of the amounts owed to parties here”.
oBike’s records show that there are more than 220,000 deposit holders in Singapore but only an approximate S$440,000 worth of deposit claims have been filed.
Trade creditors, vendors, regulatory agencies and town councils, have filed about S$768,700 worth of claims against oBike in January 2019.
According to FTI Consulting, they have managed to recover about S$541,000 from the sales of bikes and the funds held by third-party service providers.
Even after multiple back-and-forths between oBike’s majority shareholders and the liquidator, the repayment process drags on as the Chaves brothers stand firm on their request for a detailed breakdown.
So, How Much Exactly?
Here’s what we understand so far:
oBike Singapore had a total of S$12 million of funds, of which, S$10 million was transferred to oBike Hong Kong; Liquidators confirmed that S$8.9 million was owed and that they’ve managed to recover about S$550,000 from the sales of assets.
In a meeting with the brothers on 12 February, we asked about the S$10 million transaction.
Moises quickly explained, “Before I pay FTI, I made a condition [that] Joshua Taylor has to clarify the statement he made on 1 August.”
“The company moves money in and out – even more than S$10 million. It’s a global company; they move money in and out. The company had about S$30 million in bike assets.”
Moises continued, “In the in and out of the company, Joshua said they took S$2 million out.”
Taylor’s statement on the S$10 million transaction seemed to imply that it took place before the liquidation.
“How does everyone think about that statement, that before FTI received the company, the old management took S$10 million out?” Moises said.
“That’s not true. It was the cash flow of the company.”
So here’s where it gets a bit strange.
“The thing is that Joshua said S$10 million. So now he needs to prove [to] the world that he recovered S$2 million,” Moises iterated.
According to Moises, it was a front Taylor had put up to prove to members of the public that what he said was true.
“So I told him, I won’t put S$10 million and if you want me to pay, you have to clarify on press what you said.”
Moises clarified that the amount FTI can claim legally is S$1.8 million, which includes the S$600,000 worth of liquidator fees.
Thus, the actual amount of money to be repaid is S$1.2 million.
However, with all that’s been said and done, Moises shared that people would think he didn’t make the full payment or that they “did this transaction just for PR”.
“I won’t tolerate my image to be damaged, or [allow] people [to] comment ‘cheap bastard’ [because they think] that I paid less than what was claimed,” Moises said with finality.
He added that while FTI has been cooperating with them, they were not as “supportive, or at least, [they didn’t] promise” him anything, instead they kept delaying and asking for more time.
“They are charging about S$700,000 in fees. Why do they need more time? What [have] they been doing all this time?”
Earlier on, we wrote that there are over 220,000 registered oBike Singapore users.
Moises refuted FTI’s claim for users’ deposits, revealing that Taylor wanted him to pay “250,000 users times S$49” worth of debt.
“Ridiculous,” he exclaimed.
“That’s where the S$10 million came from.”
Not What They Expected
The Chaves’ brothers told us that they gave FTI Consulting until 15 February to send the relevant information through their lawyer.
Prior to that, during a meeting between the Chaves brothers and the liquidator on 23 January, they claimed that they only received a draft settlement and a joint press release.
Moises said that they didn’t need a settlement as his role is the paymaster, and reiterated that he won’t proceed with the repayment until he gets the detailed breakdown.
“We finished the messy handover on 24 September ,” Moises said, adding that they met former oBike founder and CEO Shi Yi personally.
He clarified that Shi Yi claimed that he was not involved in the operations and that many employees had left so he only had bits and pieces of the company, and that he gave Moises what he could.
Apparently, Shi Yi informed them that they only had to pay off a total of S$13 million and that was their agreement.
“We have a clause in the agreement that says that he will provide information, [and] that he swears that the issues are not more than S$13 million,” Moises recounted.
“But with the little information we have, [it seems the total amount] is more than that.”
Frustrated that Shi Yi had delayed the transaction and wasn’t upfront with the debts, the brothers decided to start a legal process against him.
Beginning A New Life Cycle
In a call with Moises in the first week of April, he confirmed with us that FTI hasn’t yet given them the information that they require to begin the repayment process.
He also didn’t provide any further details with regards to their communication with FTI.
In spite of this, the brothers applied for a sandbox licence in February to launch 500 e-scooters under the brand, 0MN1, a new e-scooter sharing firm under their Costa Rica-based family company OSS Inversiones.
They are aiming to launch it by this month, Moises told us, but “LTA has been very vague with the dates”.
“So as soon as LTA gives us their full approval, our vehicles will be on the streets.”
Featured Image Credit: Zitseng.com