Sources said Bose has disputed these allegations and contested her suspension, calling the company’s actions a ‘witch hunt’ that was triggered by harassment complaints she raised against an investor in the company.
The alleged accounting irregularities in the Sequoia Capital-backed company were found as it was in advanced talks to raise $150-200 million in a fresh round at a potential valuation of $1.2 billion, paving the way for it to become a unicorn.
“They (Zilingo) had the term sheet at $1.2 billion and during the due diligence auditors raised certain red flags. Bose is denying any such charge and has hired Abraham Vergis of Providence Law Asia to represent her,” one of the sources mentioned above said.
Bose declined to comment while an email sent to Sequoia Capital India did not elicit a response.
Before starting Zilingo, Bose worked at Sequoia Capital India. Source said shareholders of the company and Bose are in talks through their representatives, debating the charges and her suspension.
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Newswire Bloomberg first reported the developments at Zilingo. The Bloomberg report said Bose was also called for a meeting on March 31 with three board members and was told about the complaints and alleged irregularities.
Zilingo had raised $226 million in its last funding round in 2019, led by existing investors Sequoia Capital, Singapore’s sovereign wealth fund Temasek and others, after which it was valued at $970 million. It also raised a bridge round of $35 million from existing shareholders last year.
Startups under the radar
Zilingo’s troubles come at a time when Sequoia-backed companies have been in the news of for issues related to corporate governance and financial audits. These include fintech firm BharatPe and social commerce platform Trell.
On March 12, ET was the first to report that
EY India was conducting a forensic audit at Trell. Subsequently, ET reported citing sources on April 4 that Sequoia had called for the probe at Trell after receiving whistleblower complaints. This probe began after the company, which was last valued at $120 million, got a term sheet from Denmark’s Bestseller A/S, for a new funding round at a valuation of around $750 million. These talks have since fallen apart.
Sequoia-backed BharatPe’s board also brought in audit firms Alvarez & Marsal and PricewaterhouseCoopers (PwC) to look at governance and financial practices at the company as the spat between cofounder Ashneer Grover and BharatPe’s board became public. Grover
eventually resigned from the company on March 1 but both he and BharatPe’s board and management continue to have public spats.