Temasek-backed Zilingo suspends CEO pending probe

Temasek-backed e-commerce start-up Zilingo has suspended its chief executive Ankiti Bose pending an investigation.

In a media statement yesterday, 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 last month.

The statement did not mention what the matters of concern were.

"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 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 that her suspension is due in part to her complaints about harassment.

She has also called the investi-gation a "witch hunt", the news agency reported.

The Straits Times has contacted Ms Bose's lawyer for more details.

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 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.