Zilingo, a Singapore-based fashion e-commerce website, was founded by Ankiti Bose and Dhruv Kapoor.
About eight years later, the startup was aggressively pursuing fresh funding that will see it valued above US$1 billion.
Unfortunately, it ran into unexpected trouble along the way, resulting in the suspension, and subsequent firing, of its Chief Executive.
Here’s what happened.
Everything About the Firing of S’pore Startup Zilingo’s CEO, Ankiti Bose
On 31 Mar 2022, the Zilingo board suspended Ms Ankiti Bose, the Chief Executive of the company.
The move was authorised by the investors of the company, Zilingo revealed.
While Ms Bose is on suspension, the company will be investigating matters that surfaced in March 2022.
“In March 2022, shareholders of Zilingo and members of the board received information which required investigation. The major investors of the company authorised the board to put the CEO, Ankiti Bose, on suspension pending an investigation of the matters raised.
According to Bloomberg, Ms Bose’s suspension was caused by questions about the company’s accounting.
Concerns were raised on how Zilingo accounted for transactions and revenue on a platform consisting of thousands of small merchants.
Financial Adviser Engaged
It turns out that the suspension of Ms Bose was only the tip of the iceberg.
On 15 May, it was reported that Zilingo had appointed a financial adviser after the company’s creditors decide to recall all of their loans.
“Due to Zilingo’s failure to fulfil prior obligations under the loan agreement, the company’s lenders have made the decision to accelerate the repayment of the entire loan.”
Ms Bose, on the other hand, told Bloomberg that when she was the CEO, Zilingo did not default on loans.
“The first event of default notification was after my suspension.
“There were several means of curing the event of default. However, it seems that the interim leadership possibly did not act on them.”
According to Ms Bose, the creditors recalled their debts on 11 May 2022.
Termination of Ms Bose as Chief Executive
On 20 May, Zilingo said in a statement that it would terminate Ms Bose’s appointment “with cause”, and that it “reserves the right to pursue appropriate legal action”.
“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.”
Previously, Ms Bose had raised “certain harassment-related issues pertaining to past time periods” to the board.
Zilingo said that the issues did not contain any harassment-related complaints against its investors and nominees.
However, it was reported in the media that the investigation brought against Ms Bose was an effort to suppress said harassment claims.
Terminated On Grounds of “Insubordination”
Meanwhile, Ms Bose questioned the fairness of the investigation.
In a statement on her social media accounts, Ms Bose says that she was suspended after an anonymous whistleblower made a complaint.
“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.”
In addition, she allegedly received “a barrage” of threats against her life and her family.
What’s Next?
Other than appropriate legal action, Zilingo is also looking toward the financial adviser it has appointed for options for the company.
It will also provide more information on the saga “in due course”.
Experts: Startups Should Not Look At Corporate Governance As A Burden
According to Singapore Institute of Directors vice-chairman Adrian Chan, lessons can be learnt from Zilingo’s recent troubles.
“Paying heed to corporate governance makes good business sense and should not be viewed as a burden. And if boards fail to recognise this early on, they may find themselves paying a higher price later on.”
In his opinion, start-up boards and founders should be equipped with the necessary skills and knowledge to run their businesses effectively.
NUS Business School’s Professor Mak Yuen Teen also noted that such issues in startups are “not uncommon”.
With more problems emerging in startups, investors may demand more due diligence and better corporate governance before putting in their money.
This would mean that startups who are not prepared for these may find themselves disadvantaged.
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Feature Image: Zilingo
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