SINGAPORE - Temasek-backed e-commerce start-up Zilingo has suspended its chief executive Ankiti Bose pending an investigation.
In a media statement on Wednesday (April 13), the Zilingo board said the major investors of the company had authorised it to suspend Ms Bose while an investigation is conducted into matters that surfaced in March.
The statement did not mention what the matters of concern are.
“In March 2022, shareholders of Zilingo and members of the board received information which required investigation. The major investors of the company authorised the board to put the CEO, Ankiti Bose, on suspension pending an investigation of the matters raised,” the statement said.
Bloomberg had earlier reported that Ms Bose was suspended after new funding efforts led to questions about the company’s accounting.
The concerns centred on the way that Singapore-headquartered Zilingo had accounted for transactions and revenue across a platform spanning thousands of small merchants, according to Bloomberg’s sources.
Zilingo had been trying to raise US$150 million (S$205 million) to US$200 million with help from Goldman Sachs Group, and the funding round was expected to lift its valuation above US$1 billion.
Besides Singapore state investment firm Temasek, Zilingo also counts venture capital firms Sequoia Capital and Burda Principal, as well as Singapore's Economic Development Board’s investment arm EDBI, among its investors.
The Zilingo board said the company’s major investors have hired an independent firm to investigate the matter, and Zilingo is working closely with the investors and the independent firm for the probe.
“Proper due process has been and will be followed. The board is committed to protecting the interests of all stakeholders in a just manner while fulfilling its fiduciary obligations,” it added.
“Apart from the above, the specific details of these investigations – and the affairs of the company – are strictly confidential.”
Temasek declined to comment when contacted.
Bloomberg reported that Ms Bose has disputed allegations of wrongdoing and contends her suspension was due in part to her complaints about harassment. She has also called the investigation a “witch hunt”, the news agency reported.
The Straits Times has contacted Ms Bose’s lawyer for more information.
Regulatory checks show that Zilingo’s last financial statement was filed in March 2019.
The start-up, which provides technology solutions to support the fashion supply chain, was set up by Ms Bose and co-founder Dhruv Kapoor in 2015.
Commenting on the suspension, National University of Singapore Business School Professor Mak Yuen Teen noted that it is normal for investors to require due diligence when a start-up looks to raise more funds.
There have been situations, such as for co-working firm WeWork, where such due diligence has uncovered issues with accounting and other matters, such as conflict of interest, he added.
“As start-ups are often valued based on revenue or gross merchandise value (GMV), rather than profits, how revenues or GMV are computed is clearly an area of significant risk from an accounting and reporting standpoint,” Prof Mak explained.
He said the board does have the power to order an investigation and to put the CEO on leave or suspend the executive in such situations, but there has to be due process and natural justice, which includes fairness to the accused party.
“It is generally not appropriate for the CEO to still be running the business during the period of the investigation. It is not an easy situation to handle,” Prof Mak added.
The company made an aggressive pitch in its latest effort to raise fresh capital. Late last year, it forecast that core net revenue would rise from about US$40 million in fiscal 2021 to roughly US$60 million in fiscal 2022 and US$100 million the year after, according to presentation documents reviewed by Bloomberg News.
Zilingo said it anticipated breaking even on core Ebitda - or earnings before interest, taxes, depreciation and amortisation - in fiscal 2023 and then reaching almost US$200 million in fiscal 2026.
On March 31, Ms Bose was called to a meeting with three board members and told about "serious" complaints about discrepancies in accounts and mismanagement, according to the correspondence reviewed by Bloomberg.
She was later questioned by two people from Kroll, the investigations firm.
Her suspension is scheduled to run until May 5.
Ms Bose, through her lawyer, has argued that the directors did not follow proper procedures during the process and questioned their right to suspend her, according to the correspondence from her attorney to Zilingo.
"We are of the view that our client's suspension has been procured by invalid and defective means; that the investigation commenced into her is unfair and lacking in due process; and that she has been suspended without proper and reasonable cause," her attorney wrote.
About Zilingo's Ankiti Bose
Zilingo’s suspended chief executive Ankiti Bose co-founded the Singapore-based e-commerce start-up with Mr Dhruv Kapoor in 2015, when she was just 23.
The Indian national, a Singapore permanent resident who is understood to be around 30, was inspired to set up the technology platform after visiting Thailand’s Chatuchak weekend market several years ago.
The visit seeded the idea for the start-up, which initially sought to provide an avenue for small business owners to market their products online.
It has since broadened its focus across the fashion supply chain, providing procurement, distribution and trade services as well.
Before setting up Zilingo, Ms Bose was an investment analyst at venture capital firm Sequoia Capital in India, where she was immersed in Asia’s fast-growing tech scene.
Her achievements as a young female entrepreneur have been widely celebrated, and she has spoken in media interviews about inspiring other young women to start their own businesses and chase their dreams.
Ms Bose and Mr Kapoor, who is understood to be a year older than her, were named on Forbes 30 Under 30 Asia in 2018, and she was featured in the Singapore 100 Women in Tech List in 2020.
She has also been a speaker at several global and regional conferences, including the Bloomberg New Economy Forum in Singapore last year (2021).