New Delhi, April 17 (SocialNews.XYZ) Alarmed at the recent fraud allegations at some of its portfolio startups like BharatPe, Zilingo and Trell, top investor Sequoia Capital India on Sunday said it will continue to respond strongly when it encounters "willful misconduct or fraud", and take tough action wherever needed.
One of the biggest investors in the Indian and Southeast Asia startup ecosystem, it said that recently, some portfolio founders have been under investigation for potential fraudulent practices or poor governance.
"These allegations are deeply disturbing. We have always strongly encouraged founders to play the long game. We focus on the enduring, and discourage focussing on vanity metrics. Despite that we find some counter-examples of what we espouse," the VC said in a blog post.
BharatPe co-founder and Managing Director Ashneer Grover, along with his wife Madhuri Jain Grover, has been charged by the fintech platform of "extensive misappropriation of company funds" and using "company expense accounts" to "enrich themselves and fund their lavish lifestyles".
The Grovers are no more a part of the fintech company which initiated an internal probe against them.
On the other hand, online fashion marketplace Zilingo has suspended its founder and CEO Ankiti Bose following a probe over wrongdoing in accounting books. Shailendra Singh, Sequoia Capital India's head, has left the board of the Zilingo.
Live commerce startup Trell also probed claims that its founders siphoned off money.
Without naming the startups, Sequoia Capital India said that all it "makes us reflect on what we could have done, along with other investors who have partnered in these companies, to prevent such situations".
"It is easy to think of this issue as ascribed to poor due diligence. But let's remember that when investments are made at seed or early stage there is hardly a business to diligence. Even later stage investors can face negative surprises, post investment, if there is wilful fraud and intent," the company noted.
It said that the board is there to govern and help make decisions in the best interest of the shareholders.
"The board is not responsible to investigate on an ongoing basis unless something formally is brought up with them, which is often through a whistleblower," said the top investor.
"Better corporate governance is a shared responsibility between founders, management and the board. And to get there the ecosystem needs to come together and commit to some changes."
Sequoia Capital India said it will continue to have zero tolerance towards proven wrongdoing.
"We won't hesitate to act to protect the interest of the company and employees, even if it costs us financially. We will take tough calls where needed in the interest of doing what is right," the leading investor stressed.
"Our worst days are when we hear about breaches of integrity or ethics in the portfolio. This is the stuff that pains us deeply. And it's time we speak about this," it added.
Source: IANS
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz
This website uses cookies.
