This story was first published on April 13 2022, and updated on April 14, 2022.
Zilingo Pte, one of Singapore’s most notable startups, has suspended its chief executive Ankiti Bose in a shock move after questions began circulating about efforts taken to raise new funding for the company, according to a Bloomberg report.
“Proper due process has been and will be followed. The board is committed to protecting the interest of all stakeholders in a just manner while fulfilling its fiduciary obligations,” said Zilingo in a media statement on April 13.
Zilingo Pte, which supplies technology to apparel merchants and factories, was attempting to raise between US$150 million to US$200 million with Goldman Sachs Group Inc. During the process, however, investors began to question the company's finances as part of its due diligence process.
“It is usual for major investors and investment bankers to do their due diligence. As a result, some major investors had concerns with Zillingo’s accounting and hired an independent firm to investigate the matter,” shared Professor Tong Yen Hee who lectures at Nanyang Business School. “As most start-up firms are not yet profitable, revenue or some other top-line measures that track sales, are common financial metrics used to value such firms. Thus, accounting for these metrics is particularly subject to potential managerial bias.”
As a result, funding talks that would have likely pushed Zilingo’s valuation to over US$1 billion were stalled.
Zilingo Pte's investors, which include Temasek Holdings Pte and Sequoia Capital India, have started an investigation into this. On March 31, Bose was asked to join a meeting with three board members where she was told about “serious” complaints about discrepancies in accounts and mismanagement, Bloomberg reported.
Additionally, Zilingo’s auditor has also raised questions about its accounting and the concerns centre around the allegation that the company has not filed annual financial statements since 2019 and that it has not accounted for transactions and revenue from thousands of merchants.
So far, Bose is reportedly fighting back against these allegations and insists that her suspension came about as a result of complaints she had made about harassment.
“It is entirely plausible and perhaps more likely than not that the two [Ankiti’s past harassment complaints and the ongoing financial scandal] are completely unrelated,” explained Professor Anilkumar Samtani, the head of the Division of Business Law at Nanyang Technological University.
“The board of Zilingo could potentially be held liable for breach of their statutory and fiduciary duties if they fail to investigate any reasonable complaints or discoveries that point to accounting irregularities and one could suggest that they may be duty-bound to do so,” he continued.