Ousted ex-Zilingo’s CEO sues investor US$100m for defamation

Ousted ex-Zilingo’s CEO sues investor US$100m for defamation

It was reported in Indian news media on Saturday (22 April 2023) that former Zilingo’s co-founder and CEO Ankiti Bose has filed a US$100 million defamation lawsuit against angel investor Mahesh Murthy.

Murthy co-founded an early-stage venture capital (VC) company called Seedfund, which was among the first to invest in Ms Bose’s company. Subsequently, Temasek also invested in Zilingo.

In her lawsuit, Ms Bose accused Murthy of falsely casting aspersions on her in an article, “From Vulture Capital to Victim Capital: Mahesh Murthy’s Take on VCs in India”, published in the Outlook Business magazine on 1 March last month.

Ms Bose claimed that the article has caused damage to her “name, reputation and standing, and image”. “The plaintiff (Bose) states and submits that the defamatory and untrue claims of the defendant caused damages to the name, reputation, standing and image of the plaintiff in the eyes of the public,” according to her court filing at the Bombay High Court last Thursday (20 April).

Murthy didn’t name Ms Bose in the article. However, in his article, he did talk about founders who took money illegally out of their startups and mentioned “one lady” who “ran a popular fashion portal and took Sequoia’s money”. “

She got her firm to pay her lawyer some ₹70 crore (US$8.5 million) as fees and—it is rumoured—got a lot of that amount directly back to herself as her cut,” Murthy alleged.

Ms Bose told the media that the description in the article was far too specific about her and couldn’t have meant anyone else.

“The fact is there was no evidence presented to me; there was no report presented to me. There were just a lot of media statements and a lot of unnamed sources saying things, but nobody (else) saying anything directly on record,” she said.

“There has been a barrage of misinformation in the media about me, but it has always been unnamed sources. No one (else) has been very descriptive and specific about me and said it on record.”

“The message that I want to make sure goes through is that – and I’m saying this on record is that — look, this media campaign hurts me. And when people do it, I will take action,” she said.

“As we start to identify these people and these sources, we will take action. It’s very hard to take action against unnamed sources.”

“Serious financial irregularities”

Last April, news broke that Ms Bose was fired over irregularities found in Zilingo’s accounting.

“Following an investigation led by an independent forensics firm that was commissioned to look into complaints of serious financial irregularities, the company has decided to terminate Ms Ankiti Bose’s employment with cause, and reserves the right to pursue appropriate legal action,” the company issued a public statement last May.

During fundraising last year, investors began questioning its finances as part of the due diligence process.

It led to Temasek and Sequoia Capital starting an internal investigation into Zilingo’s financial practices. It was found that, in fact, the company had not filed any annual financial returns since 2019.

Investigators also questioned the way Zilingo had accounted for transactions and revenue. When the fracas started, Temasek immediately pulled back one of its staff who was sitting on the board of Zilingo.

In addition to questions about Zilingo’s accounting practices, it was found that payments to several service providers of more than US$7 million were quietly signed by Ms Bose without the knowledge of other senior executives. The payments were said to have gone to about five IT and consulting firms.

And according to insiders, it wasn’t clear what services they delivered. The investigators did not identify whether there were links between the Zilingo payments and the CEO.

Zilingo was finally liquidated in January this year less than a year after Ms Bose was fired from the company. Singaporeans’ money was lost thanks to Temasek’s decision to invest in Ms Bose’s company.

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