Zilingo board said to discuss replacing CEO Ankiti Bose after suspension

Ms Ankiti Bose's current suspension runs through May 5. PHOTO: ZILINGO

SINGAPORE (BLOOMBERG) - After suspending Ms Ankiti Bose from her post as chief executive officer, the board of Zilingo is discussing replacing her for good amid an investigation into the Singapore start-up's accounting practices, according to people familiar with the matter.

Directors have been talking regularly in recent days to consider the future of Ms Bose and Zilingo itself, said the people, who asked not to be identified because the discussions are private. Ms Bose, whose current suspension runs until May 5, has pressed the board to clarify her status in part because she is concerned the company is growing directionless, the people said.

The board has not yet decided who will replace Ms Bose, though one option discussed is to appoint interim leadership, possibly including senior executives and investors, the people said. Private investigative firm Kroll is conducting a probe of Zilingo's bookkeeping and is aiming to finish soon.

Ms Bose has denied any wrongdoing and has hired an attorney to fight back against what they have described as a "witch hunt". She has grown frustrated with the conflicts and has begun to realise she is unlikely to return as CEO, according to one of the people.

In a statement to Bloomberg, Ms Bose said she is "fully committed to cooperating with the board in the investigations" and that "one thing we all agree on is that whenever there are credible complaints, as board members, we are obligated to look into them and do what is best for the company".

Zilingo did not immediately respond to requests for comment.

Zilingo, backed by Sequoia Capital India and Singapore's Temasek, had been one of the highest-profile start-ups to emerge from Singapore until revelations about its accounting probe and the CEO's suspension emerged this month.

Sequoia said on behalf of the board that any question of change in management is "speculative and premature at this stage".

Temasek said in its own statement: "We expect our portfolio companies to abide by sound corporate governance and codes of conduct and ethics. We are therefore supportive of the board's investigation into the complaint as part of good governance, to safeguard the interests of the company."

Zilingo, which supplies technology to apparel merchants and factories, had been trying to raise as much as US$200 million (S$273 million) with help from Goldman Sachs when prospective investors began to question its financial practices. The concerns involve how the start-up accounts for revenue on a platform used by thousands of small merchants, as well as the consolidation of its Indonesia operations, the people said.

The company raised US$226 million at a valuation of US$970 million in 2019 when Ms Bose was 27 years old. But the Covid-19 pandemic took a toll on its business: Revenue dropped by about a third in fiscal year 2021 to roughly US$40 million. Ms Bose took a pay cut of about 30 per cent as a result, while the company laid off staff.

The clash between Ms Bose and the board has escalated in recent days as executives and directors sort through who is responsible for the start-up's financial state, the people said.

Mr Shailendra Singh from Sequoia Capital India and two other directors have resigned from Zilingo's board in recent weeks. Sequoia's Mr Sandeep Kher has taken over his director post at Zilingo.

Sequoia India made a post on its website on Sunday, following troubles at several of its start-ups including Zilingo.

"We usually stand shoulder to shoulder with our founders during hard times. But on some rare occasions, we wake up feeling disappointed. Our worst days are when we hear about breaches of integrity or ethics in the portfolio. This is the stuff that pains us deeply. And it's time we speak about this," said the post, which did not name any individual partners and was attributed only to "Team Sequoia".

"Recently some portfolio founders have been under investigation for potential fraudulent practices or poor governance. These allegations are deeply disturbing," it read. "We need some guardrails that we, as an ecosystem, sign up to, so that a few errant founders don't create big setbacks for the wider ecosystem at large."

Sequoia's Mr Singh had raised the idea of replacing Ms Bose as far back as January of 2021 and had suggested Mr Ananth Narayanan, the former CEO of Myntra, as a successor, the Morning Context reported earlier. Ms Bose, who had worked at Sequoia before co-founding Zilingo, fought back against that idea.

Ms Bose is understood to have made the case that Sequoia and other investors are now using the pretext of accounting to oust her unfairly.

The board has also argued that as Zilingo emerges from the Covid-19 downturn, it is better to press the reset button with a new CEO, one person said. While Ms Bose feels loyalty to many employees at the company, she has grown disappointed that directors have not backed her with sufficient support, another person said.

"I'm committed to, above all, acting in the interests of all of our customers, our hundreds of employees, our shareholders and... together with the cooperation of the board, we will find the most constructive path forward," Ms Bose said in her statement, the first she has made since the investigation began.

"I hope that the media and social media can give us some privacy as we resolve this in the best way possible for the company, its stakeholders and the entire ecosystem."

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