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Society Pass founder and CEO Dennis Nguyen
Rahul Narain, former chief technology officer of Nasdaq-listed Society Pass Inc.’s (SPI), is seeking damages of over US$1.3 million from the Vietnam-focused data-driven loyalty company for allegedly breaching his employment contract.
In a complaint (a copy of which is with e27) filed before the New York State Supreme Court in December 2019, Narain alleged that Society Pass, registered in Nevada, failed to pay him his earned compensation in salary, bonus payments, healthcare reimbursements, equity awards, and severance pay.
Narain pleaded that the court direct Society Pass to pay him damages amounting to not less than US$566,000 in earned and due compensation, equity awards and severance compensation, besides US$750,000 for breaching the common stock purchase warrant.
Society Pass has denied Narain’s claims in a counter-complaint in the court. An email sent to Society Pass founder and CEO Dennis Nguyen seeking his comments elicited no response when publishing this article.
Also Read: Society Pass launches US$26M IPO on Nasdaq, shares surge 230 per cent
The case revolves around the employment agreement signed between SPI and Narain three years ago. The complaint said that Narain joined Society Pass as an advisor and consultant for a term of approximately three months in November 2018. As per the terms of the agreement, Narain — a highly experienced computer programmer and technology advisor and formerly the chief architect for IBM Mobile Appliance — would join SPI as its CTO at the end of the said term.
Both parties extensively negotiated an employment contract in January 2019, following which Society Pass agreed to pay Narain a monthly salary of US$20,000, effective January 1, 2019. Half of the salary (US$10,000) would be paid initially, with the balance amount to be paid upon the closing of SPI’s Series C financing round.
In addition, Society Pass also agreed to pay Narain US$36,000 annually (US$3,000 a month) towards his healthcare expenses. This payment was also due upon the closing of the Series C round. Besides, SPI would pay Narain a Series C Bonus totalling US$350,000.
As per the terms in the contract, Narain was also entitled to 4 per cent of Society Pass’s common stock upon Series C closing. The parties agreed that these shares would be issued to him in multiple tranches quarterly, with effect from February 1 2019.
According to Narain, SPI, however, failed to honour the contract. “SPI breached the terms of the agreement almost immediately by failing to place Narain on the company payroll, despite several requests from him and SPI’s then COO Thomas O’Connor. As of the end of October 2019, the amount of taxes due based on the outstanding salary, bonus and healthcare payments were approximately US$17,500,” the complaint said.
While Society Pass wire-transferred him a monthly salary of US$10,000, it discontinued the payments from August 2019 without giving him any notice.
As per Narain’s belief and information from sources, Society Pass closed the Series C round in September 2019. So, according to the agreement, SPI owes Narain US$120,000 in unpaid salary as of end-October 2019. The additional payments of healthcare reimbursements and bonuses, which were also due at the close of the Series C round, were not paid either.
“[The] plaintiff be granted a declaratory judgment determining the validity of the issuance of SPI common stock shares and their value,” he pleaded.
Even as the legal battle continues, the court, in an order dated December 02, 20121, directed SPI to produce documents related to the closing of the Series C round by December 10, 2021. (The order was subsequently amended to allow SPI time until January 14, 2022, to produce the said documents.)
Also Read: Vietnam’s data-driven loyalty platform Society Pass closes Series C, relaunches Leflair
“Mr. Narain’s claim is that he was not properly compensated and that the defendants [SPI] avoided paying him by either doing the Series C financing without telling him about it or by doing other financings instead of the Series C financing so as to avoid paying him his compensation. The evidence discussed at the conference indicates that Mr.Narain was previously told the value of his deferred Series C compensation – i.e., long before the defendant indicates that the recent financing named Series C actually happened. Under these circumstances, it is not proper for the defendants to refuse to provide discovery to Mr.Narain between the date of the end of his employment and the announced now named Series C financing so that Narain can vet his theory that the defendant avoided paying him. The defendant shall produce this material by Friday, December 10, 2021, in advance of the defendant’s CEO’s [Dennis Nguyen] scheduled deposition or Mr.Narain may move for appropriate relief including striking the defendant’s answer,” said the court ruling.
In an emailed response, Narain’s attorney Ethan A. Brecher of law firm Ethan A. Brecher, LLC, told e27 that he expects SPI to produce the required documents by January 14. “We will take Dennis Nguyen’s deposition after that. A court order was necessary for the production of these documents and Nguyen’s deposition because Society Pass has not been co-operating.”
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The post Ex-CTO drags Society Pass to court over “breaching employment contract”, seeks over US$1.3M in damages appeared first on e27.