Burda Principal Investments, one of the leading investors in Singapore-based fashion start-up Zilingo, has now backed the action against its founder and CEO Ankiti Bose, thereby hinting that legal action against the ousted founder will be initiated anytime soon.
Burda Principal Investments (BPI), a division of Europe-based Hubert Media Group, noted that “significant irregularities in reporting to investors” led to Zilingo’s failure.
“Kroll Inc was jointly hired by the main investors to examine this case and the investigations on financial irregularities have been completed,” said the investment firm, as per the reports from Business Today.
Burda added further, “As the investors are still considering options for legal action, please consider we cannot comment on any details from the report or share any further information at the moment.”
The statement came in the wake of a recent report from start-up coverage portal Inc42, which revealed the extent of financial wrongdoings undertaken by Ankiti Bose including USD 10 million dubious payments, submitting conflicting revenue figures to shareholders and last but not least, ten times increase in her salary without the approval of the company’s Board of Directors.
Ankiti Bose recently filed a USD 100 million defamation suit in India’s Bombay High Court against prominent investor and co-founder of Seedfind, Mahesh Murthy, for an article he wrote in a leading business magazine.
She was also quoted as saying that the USD 100 million lawsuit was filed taking into account her balance of equity in Zilingo and “the losses that statements like this can affect future endeavours.”
Reports suggest that the lawsuit is currently in the pre-admission stage.
Singapore’s state-owned investment fund Temasek too had backed the action against the founder.
The body remarked, “We expect our portfolio companies to abide by the sound corporate governance and codes of conduct and ethics. We are, therefore, in support of the board’s investigation into the complaint as a part of good governance to safeguard the interests of the company.”
The Zilingo Board too stated, “Contrary to claims that have been circulating in the media, this decision (suspension) was taken jointly by the Board and the relevant shareholders pursuant to pre-agreed shareholder voting rights, and does not reflect the decision of a single shareholder.”
In March 2022, Zilingo suspended Ankiti Bose due to alleged financial irregularities committed by her, as an investigation led by an independent forensics firm reportedly found the 30-year-old’s involvement in the wrongdoings.
The company then remarked, “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 Ankiti Bose’s employment with cause and reserves the right to pursue appropriate legal action.”
Ankiti Bose hit back by sending a legal notice to the company’s board levelling charges of harassment and abuse, while accusing company co-founder Dhruv Kapoor and Chief Operating Officer Aadi Vaidya of not helping her when she first informed them about the harassment that she was facing.
While Aadi Vaidya and Dhruv Kapoor were given 3x and 7x hikes respectively by the founder, in a period between 2017 and 2019, Ankiti Bose’s salary grew from SGD 5,500 to SGD 58,900 in those three years.
Zilingo has already begun its liquidation process, with the start-up’s creditors Varde Partners and Indies Capital Partners finding a buyer for some of the fashion venture’s assets for an undisclosed purchase price, Bloomberg reported.