Faaez Samadi
Aug 2, 2018

Ex-Yolk leaders sue WPP Singapore and Grey over minority oppression

Grey APAC CEO Nirvik Singh and CFO Ali Belgaumi named in lawsuit.

Singapore's Supreme Court (Source: Terence Ong/Flickr)
Singapore's Supreme Court (Source: Terence Ong/Flickr)

WPP Singapore and agency Grey are being sued for alleged minority oppression by the former heads of now-defunct Singapore digital agency Yolk, which WPP acquired in 2010.

The plaintiffs in the case, which is being heard at Singapore’s Supreme Court and began on 31 July, are Yolk minority shareholders Benjamin Tan, Adrian Lee, Soh Kee Boon and Low Jun Jek. They argue that WPP Singapore and Grey allegedly “conspired and abused their powers to advance their own agenda to the detriment of Yolk and its minority shareholders”, according to court documents seen by Campaign Asia-Pacific.

Under Singapore law, minority oppression can occur when the minority or non-controlling shareholders in a company are unfairly oppressed or abused by the controlling or majority shareholders in that company.

WPP Singapore acquired a controlling 51% stake in Yolk in 2010, absorbing it into Grey Group Singapore, with minority shareholders holding a 39.2% stake.

The plaintiffs allege that Grey then embarked on an “asset and staff stripping exercise” directed by APAC CEO Nirvik Singh and CFO Ali Begaumi, without their consultation, so that the minority shareholders did not receive their final payment as part of the share purchase agreement made at the time of WPP’s acquisition of Yolk.

That final payment was to be calculated on Yolk’s average operating profit after tax between 2011 and 2015. By reducing Yolk to “an empty shell”, the plaintiffs allege WPP attempted to “deprive the minority shareholders of their final earnout under the SPA”.

In June 2016, the Yolk minority shareholders say they brought their concerns to Scott Spirit, then chief digital officer of WPP APAC (who left WPP just two weeks ago to join Eureka AI). In response, WPP sued Tan, Lee and five former Yolk employees in November 2016 for allegedly breaching their fiduciary duties to Grey and WPP, and violating their non-compete covenants by setting up three new companies: Mayhem, Brazn and Rebl.

In its lawsuit WPP alleges, among other injuries, that Tan and Lee diverted business from clients of Yolk to these three companies, specifically with regard to a project for M Hotel by Millennium Hotels & Resorts Group and a project relating to Resorts World Sentosa.

Tan and Lee then counter-sued WPP, denying any accusations as “groundless” and asserting that none of Mayhem, a startup incubator, Rebl, a social and content marketing agency, and Brazn, an IoT platform, are competitors with Yolk or Grey. This case is now being heard at the Supreme Court, with Singh having taken the stand on 31 and 1 August, and Belgaumi and Spirit expected to do so in the next couple of days.

The plaintiffs’ single out Singh and Belgaumi as the main protagonists of WPP’s alleged minority oppression.

“Singh and Belgaumi respectively, the CEO and CFO of Grey, and Grey, the entity wholly owned and through whom WPP acted, were clearly the parties directing the commission of the oppressive acts,” the plaintiffs’ opening statement reads in its counter lawsuit.

“A once thriving digital marketing and advertising stalwart, Yolk has since been reduced to a shell company with no resources, no clients, no employees and no meaningful business to speak of. There is no doubt that this amounts to oppression,” the statement says.

Campaign Asia-Pacific contacted Grey Singapore, but the agency did not respond to requests for comment.

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