Irregularities in reporting led to Zilingo’s failure

Burda Principal Investments, one of the leading investors in Singapore-based fashion startup Zilingo, has backed the action against its founder and CEO Ankiti Bose, hinting that legal action against the ousted founder may be on the anvil.

Burda Principal Investments (BPI), a division of Europe-based Hubert Media Group, said in a statement that "signficiant 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.

Hinting at impending legal action, Burda added: "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 report by leading startup coverage portal Inc42 last week, revealing fresh explosive revelations around the financial wrongdoings undertaken by Bose including $10 million (Rs 80 crore) dubious and unexplained payments, submitting conflicting revenue figures to shareholders and a 10x increase in her salary without Board approval.

Bose has also filed a $100 million defamation suit in Bombay High Court against prominent investor and co-founder of Seedfind, Mahesh Murthy, for an article he wrote in a leading business magazine. Bose was quoted as saying that the $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."

The lawsuit is currently in the pre-admission stage, according to reports. Earlier, Singapore's state-owned investment fund Temasek had backed the action against the founder, saying "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."