Cake Group Co-founder Sparks Court Battle with Winding-Up Application

Amid a shareholder dispute, Cake Group, a cryptocurrency investment platform, faces turbulence as one of its co-founders, Chua U-Zyn, files for the company’s winding up, escalating a clash within the organisation. The move, initiated through the Singapore High Court, adds to the strain within the company, exemplified by the recent restructuring announcement in mid-November.

Chua U-Zyn’s application for the winding-up of Cake Group surfaced through a notice published in The Straits Times on 7 December. The legal proceedings, scheduled for a hearing on 22 December, set the stage for a showdown within the company, amplifying the existing turmoil.

In Chua’s recent post on X (formerly Twitter), he expressed his disagreement with his partner. As internal resolutions fell short, he had no option but to address it through legal means.

The rift in Cake Group reflects divergent viewpoints between its co-founders. Julian Hosp, the CEO, expressed confidence in dismissing the court application through a blog post on Bake official website, citing the company’s financial robustness and the ongoing operations’ stability. He emphasised that the disagreement arose from internal restructuring disagreements rather than financial insolvency, asserting the company’s solvency and operational strength.

He also highlighted the possibility that Chua aimed to fortify his position within the company,

“I’ve been advised that initiating a Winding Up Application is a common tactic employed when a disputing partner wants to strengthen their position.”

The discord stems from internal disagreements arising from the restructuring announced by Dr. Hosp in mid-November. The announcement revealed a reduction of 30% in staff, affecting 52 employees across the Singapore and Kuala Lumpur offices, illustrating a broader challenge faced by the company due to misjudgments in scaling its operations during a period of exuberance in the digital assets market.

According to Tech in Asia, the tensions between both co-founders have been going on for months and Chua was kept out of the loop regarding the layoffs in November which he had opposed. From his standpoint,

“carrying out retrenchment exercises in 2023 is clearly in violation of the board’s decision. Carrying it out without the board’s approval will be challenged legally or otherwise, and I reserve my full rights in that regard.”

Former employees were surprised at the extent to which the situation had worsened, while another expressed,

“I’m amazed at how emotional they (the co-founders) are and at their inability to protect their investment.”

As money and trust have been placed into the company, users relayed their disappointment on the approach they have undertaken which should have been kept confidential and settled internally. This will also tarnish the reputation they have diligently maintained in the past.

Screenshot of a reply under Chua’s X post

Screenshot of a reply under Chua’s X post

Screenshot of a reply under Dr. Hosp ’s X post

Additionally, one individual commented that this seems to be a recurring cycle for Dr. Hosp, drawing connections to TenX, where he served as the co-founder and president. He departed from TenX in January 2019 due to the inability to reach an agreement on new terms for the company’s future roadmap with the fellow co-founder, Toby Hoenisch.

Screenshot of a reply under Chua’s X post

The upheaval at Cake Group occurs within the context of the broader cryptocurrency landscape. The crypto winter, marked by the downfall of several prominent entities in the space, has cast a shadow over the industry. The emergence of institutional players and a shift towards tokenization and stablecoins augurs potential changes in the sector’s trajectory, with hopes of a recovery from the downturn.

As the dispute unfolds within Cake Group, the implications reverberate not only within the company but also across the cryptocurrency landscape. The impending court proceedings and efforts to dismiss the winding-up application underscore the urgency to resolve internal conflicts for the company’s stability. In navigating this challenging period, the resolution of disagreements between co-founders becomes imperative to steer Cake Group through these turbulent waters.

* Original content written by Coinlive. Coinbold is licensed to distribute this content by Coinlive.