WPP and the shareholders in Yolk, including former CEO Ben Tan, have agreed to settle their dispute which is currently being heard in the Singapore High Court.
In a statement to Marketing, a WPP spokesperson said, â€śThe settlement is confidential but specifies a transfer of shares in Yolk to WPP, on agreed terms.Â The parties are comfortable that the settlement satisfies both partiesâ€™ concerns which led to the litigation. The parties look forward to putting these issues behind them and moving forward.â€ť
This comes shortly after news broke out about a legal battle between the minority shareholders and ex-employees of the now-defunct Yolk, WPP and the senior management of Grey Group over a minority oppression trial. The matter first surfaced in 2016, when minority shareholders of Yolk had complained about minority oppression from regional Grey Group management, Marketing understands.
According to reports, when Yolk complained about minority oppression from regional Grey Group management, WPP retaliated by suing former Yolk CEO and CTO Benjamin Tan and Adrian Lee respectively, who were shareholders, along with five former employees for violating their non-competitive convenants as they had set up businesses in venture building, IoT and social content automation platforms.
The four minority shareholders of Yolk â€“ Tan, Lee, Soh Kee Boon and Low Jun Jek â€“ are then said to countersue WPP, Nirvik Singh and Ali Belgaumi, according to a hearing schedule.
This was six years after WPP has acquired the digital agencies under its wholly-owned operating company Grey. Yolk, which was first founded in 2001 in Singapore then had a team of 40 and a presence in Malaysia, Thailand and Australia. Its client list boasted brands such as Canon, Ciba Vision, Microsoft and Singapore Economic Development Board and its unaudited revenues for the year prior to its acquisition, ending on 31 December 2009, were G$1.3 million with gross assets of Singapore $0.5 million at the same date.
Court filings seen by Marketing yesterday also show Yolk stating that Grey provided services to Yolk and charged Yolk at full value. Take, for instance, the videography work that Greyâ€™s in-house production unit â€śGreyWorksâ€ť performed for Yolk. This â€śGreyWorksâ€ť unit would bill Yolk accordingly.
Kelveen Soh, Yolk Singaporeâ€™s then-CEO, also testified that because the bulk of Yolk staff were deployed to assist Grey Group Singapore to work on these awards / pitches, they produced less revenue-generating work for Yolk. The statement added that there were also no agreements between Yolk and Grey and/or WPP that Yolkâ€™s resources could be used to benefit the Grey Group without any compensation. Other issues raised were:
- Converting the country units to digital units under the control of Grey.
- Loading of costs to Yolk.
- Denying it revenue.
The legal battle attempts to address issues pertaining to Tan ceding control of Yolkâ€™s country units in 2014, as well as the retrenchment exercise, and transfer of Yolk employees to Grey Group Singapore. The suit also addresses whether Yolk was â€śrendered a shell company with virtually no staff or clients of its own through WPP Singaporeâ€™s, Nirvikâ€™s or Aliâ€™s actionsâ€ť. In addition, it addresses whether Grey Group Singapore had failed to attribute revenue for work done by Yolk staff for Grey Group client accounts and awards.
The suit also extends to matters regarding Yolkâ€™s and Greyâ€™s business in Malaysia and Indonesia.
In Malaysia, it is alleged that Grey Digital Malaysiaâ€™s revenue for work done in 2013 and 2014 was reversed, with the suit determining if it was legitimate. It also looks to determine whether Grey Group Malaysia had failed to allocate revenue to Grey Digital Malaysia for work done for the Malaysian SEA Games. In Indonesia, it looks to determine whether a disproportionate percentage of Grey Group Indonesiaâ€™s overheads had been loaded into Grey Digital Indonesiaâ€™s books.