Rahul Narain
(This article — first published on September 18, 2023 — has been updated with the details of the latest court order.)
In yet another blow to Nasdaq-listed Society Pass Inc., a US court ordered the data-driven loyalty company to pay US$1.08 million to its former CTO, Rahul Narain, for breaching his employment contract.
The latest judgement, delivered on December 26 by the Supreme Court of the State of New York (the US) on a lawsuit filed by Narain four years ago, comes over three months after the court directed the firm to pay approximately US$750,000 to the plaintiff. Narain had appealed to add a 9 per cent interest rate, which the court granted.
The final amount of US$1.08 million included ~US$749,190 (the value of the 130 company shares Narain is entitled as per the contract) with interest thereon at the statutory rate of 9 per cent per annum from September 4, 2019, until the entry of judgment in the amount of US$290,000.
“…Adjudged that Plaintiff Rahul Narain, residing at 15721 Berea Drive, Odessa Florida 33556 do recover of Defendant Society Pass Incorporated, with its principal executive office located at 701 S. Carson Street, Suite 200, Carson City, Nevada 89701: (a) the sum of $749,190.00 with interest thereon at the statutory rate of 9% per annum from September 4, 2019 until entry of judgment in the amount of $290,767.82; (b) the sum of $10,000.00 with interest thereon at the statutory rate of 9% per annum from September 1, 2019 until the entry of judgment in the amount of $3,888.49; the sum of $10,000.00 with interest thereon at the statutory rate of 9% per annum from October 1, 2019 until the entry of judgment in the amount of $3,814.52; (c) the sum of $10,000.00 with interest thereon at the statutory rate of 9% per annum from November 1, 2019 until the entry of judgment in the amount of $3,738.08; together with costs of $200 and disbursements of $480 taxed by the Clerk of the Court, respectively, making in all the sum of $ 1,082,078.91 and that the Plaintiff have execution thereon,” read the judgement.
The case concerns the employment contract signed between Society Pass and Narain in 2019. As per his complaint, Narain joined Society Pass as an advisor and consultant for a term of approximately three months in November 2018. The agreement said Narain — a highly experienced computer programmer and technology advisor and formerly the chief architect for IBM Mobile Appliance — would join the Vietnamese firm as its CTO at the end of the said term.
Both parties also extensively negotiated an employment contract in January 2019, following which Society Pass agreed to pay Narain a monthly salary of US$20,000, effective January 1, 2019. Half the salary would be paid initially, with the balance to be paid upon the closing of Society Pass’s Series C financing round.
In addition, the firm, originally from Vietnam, also agreed to pay Narain US$36,000 annually (US$3,000 a month) towards his healthcare expenses. This payment was also due upon the closing of the Series C round. Besides, Society Pass would pay Narain a Series C Bonus totalling US$350,000.
Furthermore, Narain was also entitled to 4 per cent of Society Pass’s common stock upon Series C closing. The parties agreed that these shares would be issued to him in multiple tranches quarterly, effective February 1 2019.
Also Read: US court orders Society Pass to pay pre-IPO shares to co-founder and ex-CMO; company under SEC probe
However, Narain accused the company of failing to honour the contract terms and pay him his earned salary compensation, bonus payments, healthcare reimbursements, equity awards, and severance pay.
Earlier in September last year, the court ordered Society Pass to award a significant block of pre-IPO shares valuing approximately US$6.61 million, with up to an additional US$2.38 million penalty interest, to its co-founder and former CMO Thomas O’Connor for the breach of the Common Stock Purchase Warrant.
According to court documents, Society Pass was being investigated by the US Securities and Exchange Commission (SEC) earlier this year.
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