New Delhi : Fashion B2B e-commerce startup Zilingo Ptey Paid 68 crore to firms owned or related to Sandeep Kapur, former general counsel for India and Southeast Asia in Sequoia Capital India, the Silicon Valley venture capital firm said in a court filing on Saturday. Sequoia said a forensic audit expert found no justification for this payment, prompting the VC firm to caution its portfolio companies against doing business with companies controlled by Kapoor.
Sequoia Capital India was made aware of a “disproportionately large payment” in mid-March, which handed over to forensic investigator Kroll to investigate in relation to Zilingo, the VC firm told a city court in Bengaluru on Saturday. said in an affidavit submitted to. Sequoia, in its 19-page affidavit, said that the fact-finding exercise has revealed that the services provided do not justify the payment made to Plaintiff No. 2 (Algo Legal), the firms concerned and another closely linked entity .
Of 68 crores, 45 crore was paid to Algo Legal, while The affidavit said 18 crore was paid as fees to a firm “closely linked” with Kapoor for the alleged software system.
“The fact-finding exercise concluded that many of these payments were not in conformity with the terms of engagement/contracts between Plaintiff No. 2 firm and the above-mentioned portfolio company,” Sequoia said, referring to Algo Legal and Zilingo, respectively.
Kapoor and a lawyer for Algo Legal told the court that Sequoia’s allegations regarding Zilingo were baseless. Kapoor, who worked with Sequoia between June 2010 and March 2019, founded Algo Legal a few months after leaving the VC firm.
Sequoia Capital India was dragged into a legal battle by Kapoor, who has alleged that Sequoia’s letter earlier this month warning his portfolio companies against working with his firms, including Algo Legal, was baseless. Kapoor argued that news reporting by the media, including HT Media, which publishes Mint, and some other media firms, hurt his reputation.
Sequoia cautioned its portfolio companies to include Algo Legal and four entities, one of which is incorporated in Singapore. Ye Themis, Quant Legal Tech India Pvt. Ltd., One Delta Technology Solutions Pvt. Ltd., and One Delta Synergies Singapore Pte.
Sequoia severed its ties with Algo Legal in January, after the founders of the Bengaluru-based Unicorn told their board members, including a Sequoia representative, that Kapoor had solicited business aggressively, as Mint reported in its June 6. mentioned in the edition. A Sequoia executive wrote in an email on January 31, “I write to let you know in connection with the upcoming termination/renewal cycle of engagement between SCI Entities and Algo/Quant Legal that SCI Entities intends to terminate all engagements.” ” , to Dhruv Nagarkatti, the then Chief Operating Officer of Algo Legal.
Nagarkatti resigned from Algo Legal on June 3 after news of Sequoia’s breakup surfaced in the media. In the past two months, at least 24 lawyers, including six partners, have left Algo Legal because many were concerned about reputation damage, Mint reported in its June 7 edition.