Sequoia Capital Responds, As Its Portfolio Firms Face Financial Fraud Allegations
The response comes at the time when some of its portfolio startups such as BharatPe, Trell and Zillingo have come under investigation for financial irregularities
Sequoia Capital broke the silence over the controversy, as some of its portfolio companies such as BharatPe, Trell and Zillingo are caught in corporate governance issues and potential fraudulent practices. The American venture capital firm said in a blog, "The allegations are deeply disturbing."
In the blog post, published on 17 April, Sequoia Capital said, "We will respond strongly when we encounter wilful misconduct or fraud. When whistleblowers call us to report on issues, we always take them seriously."
The company responded at the time when some of its portfolio start-ups have come under the investigation for financial irregularities. Ashneer Grover, co-founder of BharatPe, has left the company wherein his wife Madhuri Jain and relatives allegedly misused company funds. Live commerce firm Trell's founders are also facing accusations for inappropriate usage of startup's fund. Singapore-based e-commerce company Zillingo, has suspended its chief executive Ankiti Bose over accounting issues. Later, Sequoia Capital India's head, Shailendra Singh, also left Zilingo board.
"We will take proactive steps including, governance training for founders and senior management, implementation of whistleblower policies, more independent board representation and asking for more disclosure and rigorous adoption of internal audits and controls," Sequoia Capital said in a statement.
"Good governance begins in the founders' heads. No amount of oversight by investors, boards, audit committees or auditors can ensure company is well governed if the founders are not committed to their objective," Sanjeev Bikhchandani, InfoEdge founder, reacted to Sequoia Capital's blog in a tweet.
Sequoia Capital is a venture capital firm that invests in consumer, technology and healthcare startups. The company is now, reportedly, worth over $100 billion.