Disclaimer: Vulcan Post is an impartial party in this situation, and this is not paid content by Vettons or any of the affected parties.
Vettons, an ecommerce company and platform, has come under fire recently for allegedly not paying its staff members their salary as well as EPF contributions.
According to The China Press and Sumberkini, former employees of Vettons protested the company at its headquarters in October, holding a banner that read: “Vettons Sdn Bhd Cyrus Chew Yem Seng return our salary, taxes, and EPF”.
Another banner claimed that the company owes the staff RM6 million in salaries and another RM6 in EPF contributions.
A former employee told Sumberkini that the company had not paid the staff’s salaries for eight months, and that it’s rumoured that no EPF payments have been made since April 2021, despite payslips from then stating that the deductions had been made by the company. The employee said that they have filed 30 police reports in light of that.
Due to such issues, multiple reviews on Vetton’s Glassdoor page also allege that the business is a “scam”.
Similar to what Sumberkini reported, these reviews from employees shared that EPF contributions were dedicated from their salaries, but Vettons did not actually pay it to the EPF.
Some reviewers also claimed that Vettons has not been making “PCBs (Potongan Cukai Bulanan)”, which are a series of monthly tax deductions that go towards the payment of taxes in relation to one’s employment income.
These deductions are retained by the employer and paid to the Inland Revenue Board (LHDN).
This aligns with what was reported by the China Press, who quoted a former employee saying that they’re now being pursued by LHDN for taxation issues.
Claims that the company has habitually delayed paying salaries and not making the EPF contributions have been made since 2020, perhaps indicating that this might have been a norm for Vettons since it launched the ecommerce platform.
On Google, it shows that Vettons has been permanently closed, and its website, vettons.com, can no longer be reached. Although the app is still available on the app store, it doesn’t seem to work anymore and instead only shows a loading screen.
Who is Vettons?
Vettons is a Malaysian technology solutions provider that launched its own ecommerce platform in 2020, inspired by the likes of Amazon and Alibaba.
At the time of its launch, Vettons had carried out several marketing exercises, and worked with Vulcan Post too on sponsored content to share their USPs. This included offering same-day deliveries and only carrying genuine goods.
It had introduced an AI shopping assistant to its users as well as incorporated AR technology to help its customers visualise products on its platform.
According to a feature by Malaysia Retailer, the company’s founding team consisted of Cyrus Chew, Dato’ Sri Ng Sing Huat, and Dato’ Sri Dr. How Kok Choong.
Particularly notable is Dato’ Sri Dr. How Kok Choong, who was Co-Chairman at Vettons, a position which an insider source confirmed with us.
Dato’ Sri Dr. How Kok Choong was also listed as a chairman on the Phoenix Plus Group, a Malaysian property company, as shown by hits on Google. However, upon clicking on the page, it seems like all mentions of his name have been removed.
With that said, we’re not sure what his or the others’ statuses are in Vettons in recent times. None of them have spoken up publicly on the allegations.
Editor’s Update [22/11/2022]: Dato’ Sri Dr. How Kok Choong has reached out to us with his side of the story regarding the Vettons situation, and we are reporting the points he shared as a neutral third-party.
Dato’ Sri Dr. How Kok Choong confirmed that he was a non-executive Co-Chairman at Vettons up until he resigned and relinquished that role in October 2021.
Prior to his appointment, he said that he was not aware that CEO Cyrus was bankrupt. He also said that it was a fact that Cyrus withheld from other investors.
Vulcan Post was shown documents from Malaysia Department of Insolvency (MdI) that confirmed four petitions of bankruptcy, three of which were filed by creditors Builder Composition Sdn Bhd, RHB Bank Berhad, and Public Bank Berhad. One notice does not have a creditor’s name.
We purchased these documents ourselves as well to verify that what we were shown were not doctored.
Dato’ Sri Dr. How’s resignation came after employees, investors, and merchants approached him about Vettons’ financial problems.
Throughout his time at Vettons, Dato’ Sri Dr. How claimed that despite making several requests to Vettons’ management to see company and accounting documents such as management accounts or audits, he was never given access to them.
Since his resignation, Dato’ Sri Dr. How has lodged two police reports dated June 17, 2022, and October 4, 2022. He is unable to provide further comment on this until the police investigation is complete, he told Vulcan Post.
Why this might have happened
According to Vettons’ Crunchbase profile, it has received a total of US$5,682,500 in funding from its Pre-Seed and Series A rounds.
On the page, it also lists Vettons City as a subsidiary. On justia.com, an American website specialising in legal information retrieval, a contract can be found stating that Pheonix Plus Corp has bought 84,906 ordinary shares in the share capital of Vettons City Angels Sdn Bhd at a subscription price of RM11.66 per share.
The contract also wrote that the total subscription amount was RM990,003.96, which was to be paid in cash to the bank account of Vettons City Sdn Bhd.
However, bear in mind that these figures found online may not be accurate or factual. Vettons Sdn Bhd’s records on MyData SSM shows only includes 2019 and 2020 filings as well, so its financial performance in the past two years would not be easily ascertained.
Although, Phoenix Plus Corp’s website did announce in its news page that “The Phoenix Plus Group Is Working With Vettons For A Brighter Future”.
If the allegations are true, possible explanations for why Vettons got to this point despite the large injection of funds might be that it had overspent on developing its AI and AR technology in 2020.
Considering that it had just launched its ecommerce platform, it might not have been financially stable enough yet to have pushed for such advanced features.
However, the co-chairman, Dato’ Sri Dr. How Kok Choong, had been quoted by Malaysia Retailer saying that Vettons was doing well in the beginning, having received an “overwhelming response” during the pandemic. This could be why the company was confident enough to be ambitious with its tech.
Yet, the company might not have been able to ride this high as pandemic restrictions eased up and in-person shopping was made possible again.
Furthermore, Vettons mostly focused on selling premium, big-ticket items, which could see a lower customer retention rate compared to daily essentials.
As of now, there have been no public updates from the former Vettons employees on the status of their allegedly unpaid salaries. Vulcan Post has reached out to former employees as well as the CEO for further comment.
What the ex-employees had to say
Editor’s Update [22/11/2022]: A representative of Vetton’s ex-employees has since reached out to us with their side of the story regarding the Vettons situation, and we are reporting their points as a neutral third-party.
A former Vettons employee shared that since the beginning of 2022, Vettons has not been paying employees’ salaries.
Meanwhile, they claimed EPF contributions have not been made since last year. However, whenever employees brought it up to Vettons’ management, the higher-ups would reassure them that these were being processed.
According to the former employee, the affected staff members have lodged numerous reports to the police, but for now, no further action has been taken as the police are still carrying out their own investigations.
The former employee shared with us the report that they filed, which included documents such as screenshots of Telegram messages from the CEO, Cyrus Chew, from June 22, 2022.
Responding to an employee’s concerns about unpaid salaries, he was shown messaging back “normally will go for liquidator to distribute”.
Part of the report also included a company winding up search result document that the former employee purchased in August 2022. This means as of then, Vettons still had not liquidated the company.
Vulcan Post has also purchased the same document on November 22 from the Malaysia Department of Insolvency’s website that confirms the company has not wound up yet.
The former employee also claimed that furniture in Vettons’ office has been sold off and ex-staff members found the furniture pieces being sold off by a secondhand furniture store.
According to the former employee representing Vettons’ other ex-staff, the resolution that the affected parties are looking for is to receive the money owed.
On top of that, they also believe there should be more governance and regulations in the tech industry so that startups would have to undergo proper procedures before being able to raise funds.
This is because the former employee finds it troubling that the company was able to get a lot of funding from investors despite all the alleged issues happening underneath the surface.
We were shown a CTOS report detailing that the paid-up capital for Vettons was RM50,000,264, and a SSM report on Vettons that we purchased confirmed this figure.
The former employee also claimed that Cyrus has opened another failed business before by the name of Hotwer Development Sdn Bhd.
According to the Edge Prop, Hotwer was the company behind an abandoned apartment project in Klang by the name of The Boss.
A discussion post on propsocial said that the abandonment was “a cruel blow to 300 investors who were initially guaranteed huge returns on their properties”.
The Edge Prop article also states that Hotwer’s CEO is Chew Yem Sing, which is Cyrus’ full name as per the police reports, seemingly corroborating what the Vettons ex-employee told us.
To verify it’s the same Chew Yem Sing from Vettons, we also bought SSM reports of Hotwer. We found Chew Yem Sing listed as a shareholder, sharing the same IC number as the one from Vettons’.
Additionally, the representative claimed that Cyrus seems to have opened yet another business. However, since Cyrus is officially bankrupt, the representative said that the new startup was opened in April 2022 under his spouse’s name.
- Read other articles we’ve written about Malaysian startups here.
Featured Image Credit: Vettons, as of 2020