SINGAPORE - Barely five years after it started in mid-2019, a car portal set up to challenge incumbent sgCarMart is skidding towards an uncertain future.
UCars has been served a notice of demand – a legal letter – by directors of its holding company 21 United Holdings to repay more than $400,000.
The notice was served in late-January 2024. UCars confirmed that it has received it, and is in the process of “verifying the amount” before working out a repayment schedule.
Soon after the notice was filed, UCars chief executive Hong Chun Mun stepped down from the helm.
He is replaced by Wynton Lee, a 30-year-old from Farquhar VC, which has invested in UCars and is now its second-largest shareholder after 21 United Holdings.
Several directors at 21 United Holdings have also stepped down. They include its former chairman Eddie Loo and other founding members who were among some 40 used car dealers who came together in 2018 to form a venture to challenge Toyota-owned sgCarMart, which they felt was competing directly with them.
In mid-2019, 21 United Holdings set up UCars, an online portal with listings of used and new cars for sale.
UCars then acquired motoring publications CarBuyer and Top Gear Singapore in 2021 from businessman Leow Ju-Len for an undisclosed sum, in an apparent bid to replicate the “editorial content” which sgCarMart has.
None of the directors and former directors ST spoke with wanted to be quoted by name. But an insider said troubles began around three years ago, with mounting losses and eroding shareholder funds.
“It’s basically a management issue,” the insider added. “The revenue stream from advertising and events did not materialise. We were burning $300,000 a month.”
As a result, some of the staff at CarBuyer and Top Gear were owed salaries. Eventually, the entire team of close to 10 people from the two publications were laid off in February. Two of them have since rejoined, but are put on a profit-sharing scheme.
Over the last 12 months or so, more than 20 others in the UCars team have also left. ST understands that only half a dozen remain now, down from a peak headcount of around 50.
Two floors of office space occupied by UCars in Ayer Rajah Crescent have been given up.
“We’ve brought cost down to $20,000 a month. And all the unpaid salaries are almost settled,” the insider added. “What we want to do now is to press the Reset button.”
He said UCars will retain the CarBuyer title, but will give up Top Gear.
According to the insider, the company is now in the process of appointing a new corporate secretary, and will focus on growing revenue from another business it acquired three years ago – Pcom-SSB, an accounting software provider which several car dealers use.
He said previous plans of listing UCars on a stock exchange are now put on hold.
https://www.straitstimes.com/singap...ceo-after-being-served-legal-notice-for-debts
