Skip to content
Sequoia Capital India pledges to take proactive action on allegations of fraud at certain startups – TechCrunch


Sequoia Capital India, one of the most prolific and successful investors in India and Southeast Asia, has responded to allegations of fraudulent practices made against some of the startups in its portfolio and has pledged to take proactive measures to strengthen compliance.

In a blog post published on Sunday afternoon, the famed venture capital fund said it was still a “work in progress” and said all players collectively needed to “improve accountability, while improving performance, so that we can unleash the full potential of this region.” has to offer.

The post – serving as Sequoia’s first official word on the matter – comes at a time when at least three of its portfolio startups have undertaken investigations:

  • Fashion market Zilingo suspended Ankiti Bose, its founder and chief executive, this month following an accounting investigation. Sequoia Capital India director Shailendra Singh has left the board. (Both developments were first reported by Bloomberg News.)
  • BharatPe co-founder and former chief executive Ashneer Grover quit the $2.8 billion startup earlier this year after an investigation found he and his wife siphoned off money. money. (Grover refuted the findings.)
  • E-commerce startup Trell recently investigated allegations that its founders embezzled money and lied about its usage and growth metrics.

The post, written by the Sequoia team, said it can sometimes seem like investors aren’t doing enough due diligence, but reminded that when investments are made in the early stage or later in the early stage, “there There is hardly a diligent business.Even later-stage investors can face negative surprises, post-investment, in cases of deliberate fraud and intent.

The post adds:

As a representative of the investors, you sit on the board, and the boards can only work with the information shared with them – the less transparency there is towards the board, the less able to truly detect errant behavior. The board is there to govern and help make decisions in the best interests of shareholders. The board is not responsible for investigating on an ongoing basis unless something is formally raised with them, which is often done through a whistleblower. Better corporate governance is a shared responsibility between founders, management and the board. And to get there, the ecosystem has to come together and commit to some changes.

At Sequoia India & SEA, we have always set the bar high for integrity because we are here for the long haul. We will take a series of proactive steps as a responsible participant in this ecosystem and do more than our fair share to drive increased compliance across our portfolio companies, including but not limited to governance trainings for founders and senior management, implementing whistleblower policies, more independent board representation, demanding more disclosures, and more rigorous adoption of audits and internal controls.

We will continue to react firmly when we encounter willful misconduct or fraud. When whistleblowers call us with an issue, we always take them seriously. We know that in some cases they may be unfounded, but we still need to look at them because it’s a board member’s fiduciary duty. We will continue to have zero tolerance for proven wrongdoing. We will not hesitate to act to protect the interests of the company and the employees, even if it costs us financially. We will take the tough calls if necessary in the interest of doing the right thing.

We hope that more people in the ecosystem will join us in this commitment to better governance. […]


techcrunch Gt

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.