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Zilingo Co-Founders Suddenly Reportedly Offered to Buy Back Company With USD$8 Million

2022-06-20 , 7:21 pm

If you’re familiar with companies such as Alibaba and Aliexpress, you might have heard of Zilingo too.

And yes, it’s based in Singapore.

Zilingo, an e-commerce platform mainly supporting the fashion industry, was founded in 2015 by Indian nationals Ankiti Bose and Dhruv Kapoor, with its headquarters in Singapore.

To put things into perspective, Zilingo isn’t just any random start-up you’d find on the streets.

With numerous investors including corporations like Temasek Holdings, Sequoia Capital India and EDBI, the investment arm of the Economic Development Board, it has apparently received over $1 billion from its various investors.

While the company enjoyed success with its operations in countries like Indonesia, Hong Kong, Thailand, the Philippines, Australia and the United States, things soon took a turn for the worst when the company announced that it was firing Ms Bose.

And because listening to a blue cat talk is always going to be more interesting than having to read through paragraphs of text, our iconic blue cat has got you covered with all the information you need to know about the company thus far:

So, the whole TL;DR about this case is that there have been some sketchy issues with the way Zilingo deals with its financial transactions, and Ms Bose, the former chief executive, ended up being suspended (and subsequently fired).

And of course, those who loaned Zilingo money want their money back.

Apart from that, it’s safe to say that this incident has turned the entire start-up upside down, as one might imagine.

But if you’re wondering how exactly Ms Bose ended up going from the literal boss to being fired, we’ll cover that in just a bit.

For now, here’s something that’s more important: A month after Ms Bose was fired, Bose and her fellow co-founder, Mr Kapoor, have suddenly issued an offer to buy Zilingo back.

And with a multi-million business on the line, here’s what you need to know.

Co-Founders Looking to Re-Buy the Company Back

Just yesterday (19 June), Mr Kapoor apparently pitched a management buyout to the management board of Zilingo.

According to those who are aware of the buyout, Kapoor claimed that he has the support of a small group of new investors for Zilingo’s future, with one of them being a private equity firm in the United States.

Based on the preliminary proposal that Mr Kapoor sent to the investors via email, this new investor group will place US$8 million (approximately S$11.2 million) in a newly incorporated entity in tranches to kickstart the “new” Zilingo.

To put it simply, Mr Kapoor and Ms Bose are looking to buy over Zilingo with the US$8 million that will be financed by their new investors lah.

On the other hand, Zilingo’s current assets and the old corporate entity will end up being liquidated “in due course” after Mr Kapoor and Ms Bose regain ownership of the company.

In addition to that, since Zilingo still owes Zorro Assets, their creditor, debt, Mr Kapoor also explained that the outstanding debt that Zilingo owes Zorro Assets will be frozen for three years.

Zilingo’s management board is supposed to meet today (20 June) to talk about the matter, so in the meantime, all we can do for now is wait for the board to make their decision.

How Ms Bose Got Suspended in the First Place

And for those still wondering how exactly Ms Bose ended up being suspended and fired in the first place, we’ve got you covered too.

If you’ve watched our video earlier (and if you haven’t, you really should), you’d have known by now that the company first ran into issues when it was revealed that Zilingo last filed its financial statements all the way back in 2019. (Yes, before the pandemic started.)

At that point in March 2019, Zilingo was worth US$970 million (approximately S$1.3 billion).

When Zilingo’s accounting practices came under scrutiny due to “financial irregularities”, this issue caused Ms Bose to be suspended on 31 March this year.

Investigations regarding the matter were conducted as well.

Eventually Got Fired

Subsequently, on 20 May, Zilingo announced that it had fired Ms Bose after investigations regarding the financial irregularities that Ms Bose was accused to be a part of.

The announcement came 51 days after Ms Bose was placed on suspension by the company.

Based on Zilingo’s statement released on 20 May, the start-up announced that it would terminate Ms Bose’s employment with the company “with cause” and that it would reserve the right to seek “appropriate legal action”.

Addressed Harassment Case Related to Ms Bose

In the same statement, Zilingo added that Ms Bose had also raised “certain harassment-related issues pertaining to past time periods” to the company’s management board earlier today on 11 April.

Although the firm did not specify who were the relevant parties in this issue, it did confirm that the issues mentioned by Ms Bose did not involve Zilingo’s investors or nominees.

Zilingo also emphasised that it had employed the help of a “top consulting firm” to aid the company in investigating these claims.

“The investigation has concluded that the company took appropriate action and followed due process to address these complaints that were brought to their notice, contrary to media reports that have suggested that the suspension and investigation into Ankiti Bose were aimed at suppressing the said harassment claims,” Zilingo clarified in its statement.

Ms Bose’s Reaction to Being Suspended and Fired

After being fired from Zilingo on 20 May, Ms Bose proceeded to release a statement on her LinkedIn account and other social media accounts on the same day.

Based on her statement, she was apparently suspended “based on an anonymous whistle-blower complaint”.

She then claimed that Zilingo chose to fire her due to her “insubordination”.

“I was suspended on the basis that the company had instructed investigators to investigate the complaint. I have neither seen the reports and not been given sufficient time to produce any documents requested by them,” she explained.

Apart from that, she revealed that she has “been receiving a constant barrage of online threats to [her] life and family”.

“Any report that comes out post my termination, would be vitiated as it seems to be instructed by conflicted parties and we will pursue our rights against this witch-hunt to the full extent of the law,” she added.

Ms Bose then concluded her statement by sharing that she will be “speaking on record shortly with more details about the conflicts of interest in the manner the process was run”.

She will also be providing details such as timelines and her claims regarding the “other matters that are being used to defame [her]”.

Lawyer’s Argument During Her Suspension

Prior to Ms Bose being suspended and fired, her lawyer previously spoke on Ms Bose’s behalf about how Zilingo’s directors failed to “follow proper procedures” during the investigation process.

Her lawyer then proceeded to raise a query regarding whether or not the management board even had the right to suspend her in this case.

“We are of the view that our client’s suspension has been procured by invalid and defective means; that the investigation commenced into her is unfair and lacking in due process; and that she has been suspended without proper and reasonable cause,” her lawyer wrote.

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Zilingo’s Response to Social Media Statements

In its most recent statement, Zilingo also addressed the social media campaigns and statements that were released when investigations regarding Ms Bose were going on.

“The company is deeply pained and disappointed to see the manner in which the board, investors and employees have been constantly attacked through ostensibly leaked and fake information, along with what unfortunately appears to be paid and defamatory social media campaigns throughout the investigation period,” Zilingo wrote in its statement.

The firm also said that the campaigns resulted in “irreparable damage” to the firm, its board, staff and backers.

Apart from that, Zilingo also touched on how debt holders have recalled their loans, which led to an independent financial adviser being engaged.

The adviser is currently “assessing options for the business” and Zilingo said that it will be releasing more information “in due course”.