SINGAPORE – In a staggering revelation, over 100 employees of the home-grown hospitality group Tipsy Collective are facing financial uncertainties as they did not receive their October salaries. This unsettling situation has arisen amid a complex and ongoing court dispute involving the firm’s co-founder and its shareholders.

On November 6, Tipsy Collective sent an internal memo to its staff, a day after the salary payments were due. The memo cited a “temporary adjustment in financial scheduling” as the reason for the payment delay. Avril Lim, the group's human resource manager, reassured employees, stating that steps are being taken to rectify the payment issue and that they could expect to receive their salaries “over the next few days.” However, many employees are left anxious and skeptical.

Founded in 2019, Tipsy Collective boasts a portfolio that includes ten restaurants and bars across Singapore and one location in Kuala Lumpur.

The company has been entangled in a legal battle since August, which has raised serious questions about its financial health and operational stability.

According to reports from The Straits Times, co-founder David Gan has launched a lawsuit against eight parties, including shareholders and investors, claiming breaches of a shareholders’ agreement and attempts to seize control of the company.

This legal strife has unveiled deep-rooted issues within the firm, including allegations of financial mismanagement under Gan’s direction.

The High Court recently dismissed Gan's request for an interim injunction, allowing majority shareholders to install new directors to the board.

Following the court's ruling, Tipsy Collective's board moved swiftly to terminate Gan's role as chief executive while retaining him as one of three directors. Alongside him, the corporate secretary was also dismissed, highlighting the turmoil gripping the firm.

In a perplexing twist, the newly installed management team reported difficulties in stabilizing the company's operations, as they lack access to essential data from Gan, further complicating the resolution of the unpaid salaries.

“We currently have no visibility over the company’s state of affairs,” a representative stated, indicating the chaotic state of the organization.

Interestingly, while Gan claims to be out of the management loop, he mentioned that he had instructed the finance team to prioritize salary payments prior to his dismissal.

“The team is working hard to ensure everyone gets paid as soon as possible,” he declared, expressing sadness over his departure from the company he helped to create.

Despite the dire situation, employees are wary about speaking out, with only two confirming the memo's content and the unpaid salaries.

This turmoil is compounded by previous financial concerns raised by the company’s majority shareholders, who have expressed fears regarding alleged mismanagement and reckless decision-making by Gan and another co-founder, Derek Ong, who passed away in August 2023.

Court filings from the defendants—including prominent figures like Indonesian investors Reino Ramaputra Barack and Santosa Kadiman—highlight further alarming allegations.

They cite the turbulent development of Tipsy Unicorn, a massive 19,000 square foot beach club on Siloso Beach, that dramatically overshot its budget from $3 million to an astonishing $6 million. Insufficient financial reporting, overdue audits, and outstanding debts totaling approximately $5.2 million to various suppliers and creditors have only amplified the situation.

As Tipsy Collective battles its internal and external challenges, uncertainty looms over its future and the livelihoods of its employees.

All eyes are now on the new management’s ability to navigate this crisis and restore the company to stability. Can Tipsy Collective rise again from this financial quagmire, or is it facing its final curtain? Time will tell!