Without naming portfolio startups, Sequoia says they will drive governance

Although Sequoia Capital India did not name any startups individually, its comments come as at least three of its portfolio companies – BharatPe, Trell and Zilingo – have been hit by corporate governance issues, including potential cases. of fraud.

Ashneer Grover, co-founder of BharatPe (file photo)

Finally breaking its silence after some of the startups in its portfolio got caught up in corporate governance issues, Sequoia Capital India said it would take “proactive steps” to drive corporate governance in startups in which it invests and would demand more disclosures and rigorously adopt internal audits. and controls.

Although Sequoia Capital India did not name any startups individually, its comments come as at least three of its portfolio companies – BharatPe, Trell and Zilingo – have been hit by corporate governance issues, including potential cases. of fraud. “Recently, some portfolio founders have been investigated for potential fraudulent practices or poor governance. These allegations are deeply troubling,” the venture capital fund said in a blog post without specifically naming any of the startups.

BharatPe co-founder Ashneer Grover left the company after an investigation within the company allegedly revealed that his wife Madhuri Jain and relatives had embezzled money from the company. The founders of online trading company Trell have also been accused of embezzling the startup’s funds and misrepresenting its growth metrics. Singapore-based Zilingo has suspended chief executive Ankiti Bose over accounting issues. Sequoia Capital India chief Shailendra Singh has quit Zilingo’s board after the allegations.

The venture capital fund said it would place special emphasis on complaints raised by whistleblowers and organize governance training for founders and senior management, implement whistleblower policies and focus on representation. more independent of the board of directors, among others. “When whistleblowers call us with concerns, we always take them seriously. We know that in some cases they may prove to be unfounded – but we still need to look into them as it is a board member’s fiduciary duty… We will not hesitate to act to protect the interests of the company and the employees, even if it costs us financially,” the investment firm said.

As of 2021, it has invested over $4 billion in more than 70 startups, including WakeFit and Nykaa-rival Purplle, among others. He is also an investor in the country’s largest information technology companies, in Byju’s and Unacademy. The investment firm was also one of the first investors in Zomato to hit the stock exchanges last year, and another of its portfolio companies, MobiKwik, has filed its draft prospectus with market regulator Sebi for an initial public offering of Rs 1,900 crore.

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