Zilingo CEO Ankiti Bose Suspended Amid Financial Investigation

Cofounder and CEO Ankiti Bose has been suspended amid an internal investigation into the company’s accounting practices and financials

Bose has reportedly disputed the claims of wrongdoing and has alleged that her suspension was due to her complaints about harassment

The investigation is said to have been prompted by Zilingo’s auditor raising questions about its accounting during the due diligence process

B2B fashion marketplace Zilingo has reportedly suspended its cofounder and chief executive officer Ankiti Bose amid an internal investigation into the company’s accounting practices and financials.

The Sequoia Capital India-backed company was in the midst of new fundraising talks which led to further questions about its accounting standards and financial practices, according to a Bloomberg report, based on unnamed sources.

Zilingo or Bose did not speak to the publication, but the report goes on to add that Zilingo’s investors Temasek and Sequoia had initiated the investigation into the company as part of the due diligence process. The company was said to be in talks to raise $150 Mn-$200 Mn at a unicorn valuation.

Sequoia and Temasek’s investigation was reportedly prompted by Zilingo’s auditor raising questions about its accounting, how it recorded transactions and revenue.

Bloomberg further claims that Bose has disputed the claims of wrongdoing and has alleged that her suspension was due to her complaints about harassment. She is said to have called the investigation a “witch hunt”, according to the publication.

Founded in 2015 by Bose and Dhruv Kapoor, Zilingo has developed a proprietary suite of applications that allow fashion merchants to access manufacturers around Asia. It also helps by enabling different procurement rates, optimised logistics services, financial services, insurances, loans and analytics for them. The company has raised over $308 Mn till date, with Germany’s Burda and Sofina Capital being its other major investors.

Currently, Zilingo has its supply base in Singapore, Thailand, Indonesia, China, Bangladesh, Vietnam and Cambodia. Its customer base includes Indonesia, Thailand, Singapore, and also ships internationally to four more countries, including US, Europe and Australia.

BharatPe To Zilingo: Sequoia’s Portfolio Of Problems

This is the fourth high-profile Sequoia portfolio company where an internal or external investigation has called into question accounting and other corporate governance standards. As concerns about due diligence and corporate governance spill over into the mainstream, VCs are likely to be more cautious in approaching investments.

The case of BharatPe is well documented by now and it could further be complicated by the latest public outburst by the company’s CEO Suhail Sameer. Sequoia currently holds nearly 20% stake in BharatPe, which is being investigated by not just auditors but also India’s Ministry Of Corporate Affairs.

The fintech unicorn’s investors, including Sequoia and Ribbit Capital, have been time and again asked about their due diligence process before the investments in BharatPe given the number of discrepancies that have emerged since then.

Besides BharatPe, Sequoia-backed Trell and Zetwerk are also under investigation for irregularities, which could yet snowball into bigger problems.

Social commerce platform Trell is going through an internal investigation for alleged party-related transactions and financial irregularities. Its existing founders Pulkit Agrawal, Bimal Kartheek Rebba, and Arun Lodhi are being investigated by the forensic team of EY India for alleged party related transactions.

On the other hand, manufacturing SaaS unicorn Zetwerk is caught up in an income tax crackdown on B2B marketplaces that has also swept up Tiger Global-backed unicorn Infra.Market.

Zetwerk’s offices and founders’ residential premises were raided on suspicion of tax evasion. The raids at Zetwerk began on March 16 last month, but it’s not clear whether the company has had to pay any fines as of now.