Sequoia cuts ties with legal firm citing ‘concerning incidents’ in probe findings

Bengaluru/Mumbai: Venture capital fund Sequoia Capital has shot off a note to a select group of portfolio companies informing them that it has stopped working with law firm Algo Legal post an investigation at one of its investee firms, multiple people aware who had received the email told ET.

This comes amid Sequoia Capital having stalled the closing of its $2.8 billion India and Southeast Fund due to an ongoing investigation at one of its portfolio firms, as
reported by ET on May 18. “All LP ( limited partner) subscription documents have been received. However, during the past weeks, shareholders in a company portfolio have received information about a potential misconduct, requiring investigation. Given these events, we have decided to postpone the close date of the Funds. We will provide you with an update when our work is complete,” Sequoia had told its limited partners in May, as we reported.

In the communication sent out earlier this week, the VC fund told founders that it has found ‘concerning incidents’ involving Algo Legal, a service provider associated with a former Sequoia India employee, and related parties. A recent investigation at a portfolio company also brought ‘concerning details’ to light about the legal firm, the mail said. Sequoia advised founders that if Algo Legal or its related entities had any dealings with their companies they should inform AZB & Partners.

ET has reviewed the mail sent by Sequoia to companies.

Algo Legal is a law firm which was founded by former Sequoia Capital general counsel Sandeep Kapoor. He had worked at Sequoia for nearly nine years and had left the VC fund in 2018, as per his LinkedIn profile.

When contacted,Algo Legal’s Kapoor, said he wasn’t aware of any email sent by Sequoia Capital India and SEA on Algo Legal to their portfolio companies. “In fact, we are not even aware of any probe that you refer to in your question. Sequoia has not formally or informally informed us of any probe of any sort,” Kapoor said in an emailed response to ET. Sequoia Capital India and Zilingo didn’t comment on the note related to Algo Legal.

Discover the stories of your interest

Kapoor’s name was not specifically mentioned in the Sequoia mail. The above-mentioned note comes soon after Sequoia-backed troubled fashion startup Zilingo fired its chief executive Ankiti Bose last month following a probe on alleged financial irregularities at the firm. Bose told
ETtech in an interview, after her removal from the company, that her termination is not the end of the ongoing saga at the Singapore-based Zilingo.

Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.

Source link

Leave a Reply

Your email address will not be published.