New Delhi, April 18 After top investor Sequoia Capital India raised a red flag over recent fraud allegations at some of its portfolio startups like BharatPe, Zilingo and Trell, Info Edge co-founder Sanjeev Bikhchandani has joined the corporate governance debate, saying that good governance begins in the founders' heads.
A Padma Shri awardee, Bikhchandani who scaled platforms like Naukri.com, 99 acres.com and Jeevansathi.com, said in a tweet thread that "no amount of oversight by investors, boards, audit committees or auditors can ensure a company is well governed if the founders are not committed to this objective".
"When I was on the Board of @makemytrip, I was awarded an ESOP. In line with Satish Mandhana's sane advice, @hitobs, Ambarish, and I decided that the economic benefit of this ESOP should go to Info Edge rather than to me as that would align all of our shareholders' interests," Bikhchandani said.
"After all, we decided if I am spending time away from Info Edge, it should benefit all of Info Edge shareholders rather than me alone. We thought we had done a small thing. We didn't think much about it," he added.
The blog post by Sequoia Capital India has triggered a chain reaction among the tech honchos in India, on how to stem the rot in the startup ecosystem.
"His (Bikhchandani's) insights are so invaluable and backed by vast experience. Must read!" tweeted Kunal Bahl, Co-founder and CEO of Snapdeal.
One of the biggest investors in the Indian and Southeast Asia startup ecosystem, Sequoia Capital India said that recently, some portfolio founders have been under investigation for potential fraudulent practices or poor governance.
"These allegations are deeply disturbing. We have always strongly encouraged founders to play the long game. We focus on the enduring, and discourage focussing on vanity metrics. Despite that we find some counter-examples of what we espouse," the VC said in a blog post.
BharatPe co-founder and Managing Director Ashneer Grover, along with his wife Madhuri Jain Grover, has been charged by the fintech platform of "extensive misappropriation of company funds" and using "company expense accounts" to "enrich themselves and fund their lavish lifestyles".
The Grovers are no more a part of the fintech company which initiated an internal probe against them.
On the other hand, online fashion marketplace Zilingo has suspended its founder and CEO Ankiti Bose following a probe over wrongdoing in accounting books. Shailendra Singh, Sequoia Capital India's head, has left the board of the Zilingo.
Live commerce startup Trell also probed claims that its founders siphoned off money.
"It makes us reflect on what we could have done, along with other investors who have partnered in these companies, to prevent such a situation," Sequoia Capital India said.
Bikhchandani said that the startup ecosystem needs guardrails so that a few errant founders don't create big setbacks for all.
"We want to build companies that are enduring, and that can only happen if governance is strong. Finally, if you are better governed you will sleep more peacefully at night, he added.
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