By David Ramli, Faris Mokhtar, Yoolim Lee and Olivia Poh
(Bloomberg) — Ankiti Bose, who was fired last week as chief executive officer of the Singapore startup Zilingo, says she’ll keep fighting to clear her name.
The fashion e-commerce platform terminated her employment after an investigation into claims of what it called “serious financial irregularities” and said it “reserves the right to pursue appropriate legal action.” The probe included questions about Zilingo’s accounting practices and payments to several service providers of more than US$7 million that were signed by her without the knowledge of senior executives, according to people familiar with the matter.
In two interviews, before and after her dismissal, Bose denied wrongdoing and provided detailed responses to key points of the investigation. She said that, in the end, the company fired her for a lack of cooperation in the investigation rather than for actual financial improprieties. She’s determined to protect her reputation.
“There is not a single payment made by Zilingo that did not have proper documents or either the finance, tech or operations teams were not aware of,” said Bose, a former McKinsey & Co. consultant who had been CEO of Zilingo since its founding. “I feel like my baby has been taken away from me without giving me a proper explanation or a chance to fight for her back. I’m grieving and fighting for myself simultaneously.”
Once a shining example of the potential for tech startups in Southeast Asia, Zilingo ran into trouble after internal whistleblowers voiced complaints this year that triggered conflicts between Bose and her longtime backers. The board suspended her on March 31 and hired investigative firm Kroll Inc. to examine the complaints. Now Zilingo’s very survival is in question.
Bose co-founded Zilingo with Dhruv Kapoor in 2015 after a visit to Bangkok’s Chatuchak market, where 15,000 merchants sell goods from across Thailand. Their aim was to build a technology platform to help those kinds of tiny merchants sell to consumers across Southeast Asia. In 2018, they began to reposition themselves as a business-to-business platform to reduce the high cash burn of working with consumers.
Zilingo’s pitch that it would help digitize the fashion industry’s antiquated supply chain helped draw venture backers, including Sequoia Capital India and Temasek Holdings Pte. It raised US$226 million at a valuation ofUS $970 million in 2019, when Bose was just 27 years old. But with pressure to grow quickly, Zilingo found itself dealing with thousands of vendors and merchants across nine countries from Sri Lanka to Indonesia. The complexity ended up straining the young company’s ability to track revenue and other financial figures.
Millions in Payments
Zilingo and its board haven’t publicly detailed their allegations against Bose. The company didn’t respond to multiple requests for comment, beyond earlier public statements.
“Following an investigation led by an independent forensics firm that was commissioned to look into complaints of serious financial irregularities, the company has decided to terminate Ms. Ankiti Bose’s employment with cause, and reserves the right to pursue appropriate legal action,” the company said on May 20. Social media campaigns and leaked information have “caused irreparable damage to the company, the board, employees and investors.”
People familiar with the Bose probe said one of the most serious allegations involves the payments to service providers that the CEO had signed off on without the knowledge of other senior managers. The payments went to about five information technology and consulting firms during the two-year period covered by the Kroll probe, said the people, asking not to be identified because details of the inquiry are private. These firms received either monthly or one-time payments from Zilingo totaling millions of dollars over that period, while it wasn’t clear what services they delivered, the people said.
Bose said all of the payments are legitimate and they certainly weren’t made to benefit her personally. She added it’s possible other senior mangers weren’t aware of the payments, although there wasn’t anything nefarious about that.
“I am 100% certain that there is nothing amiss about the way in which the payments are made,” she said. “I have heard that several individuals in the company have claimed that they are not aware of various business relationships. While I find that odd to believe, because there are so many jurisdictions and so many parts of the company, it’s possible that they were not officially aware.”
Bose said that she has not been able to check internal documents to clarify what the payments were for following her suspension, even after requesting access under Kroll’s supervision. She also hasn’t been able to contact staff or external parties who may be able to clear her name.
“I was not given sufficient access to provide documents that would exonerate me,” she said. “All I ask my shareholders and stakeholders to do is to not believe that I did not make an attempt to answer these questions.”
Kroll didn’t respond to a request for comment.
While Kroll investigators conducted forensic audits to help identify potential financial irregularities, their work did not cover whether there were links between the Zilingo payments and the CEO, the people familiar said. Such a task would require access to bank accounts, which was beyond the scope of the forensic investigation, they added.
Another key area that Bose says Kroll officials have asked about is a discrepancy in revenue figures listed in documents provided to current and potential investors. The idea that Zilingo may have used different sets of financial figures has fueled fears among investors that the startup could have been inflating numbers or misleading backers.
Bose maintains that such differences are merely the result of trying to comply with complex accounting standards across multiple countries. For example, in some cases sales made by certain merchants on the platform were counted as Zilingo’s own revenue — even though such transactions would normally be classified as gross merchandise value, or GMV, under traditional accounting rules. Here, Bose said the rules in certain countries forced her hand.
“About 12% or 13% of our GMV historically has had to be recorded as revenue due to various regulatory requirements when goods are exported from several Asian countries,” she said in the interview before she was fired, citing India, Indonesia and Bangladesh as examples. “We have tried to work around this to reduce the impact of this between fiscal ‘21 and ‘22.”
A related issue is the timing of certain transactions. Zilingo is supposed to book revenue only when goods are shipped, but Bose said there was sometimes a 30- to 90-day lag between counting revenue and when the sales would be sent out. That also resulted in two sets of numbers at times, she said.
Independent accounting experts are hesitant to make a definitive judgment without examining Zilingo’s books, but at least one questioned her reasoning.
Mak Yuen Teen, an accounting and governance expert at the National University of Singapore Business School, called it “not convincing” since most countries, including those she cited, adhere to global accounting standards. “Counting GMV as revenue is a significant risk for startups because their performance is often assessed based on revenues.”
Zilingo’s methods of accounting for discounts and incentives also had an influence on the books. The company has used aggressive methods for recognizing revenue, but Bose says the calculations are standard practice for the industry and that all of its investors were fully aware of them. She emphasized during the hours of discussion that she started Zilingo when she was 23 and depended on the finance department to sort through such quantitative questions.
“All these matters are well understood by all investors,” Bose said in the earlier interview. “Unless I am a chartered accountant I cannot touch the books, let alone cook the books.”
Uncertainty at Zilingo has been aggravated by a lack of audited figures. Public records in Singapore show it has not filed its fiscal 2020 or 2021 financial results, even though that is a basic regulatory requirement for all businesses registered in the city-state.
Bose says the delays to its fiscal 2020 audited results were due to efforts to fix an issue involving an Indonesian entity that had been missed in fiscal 2019. She says it is not unusual for startups in Singapore and Southeast Asia to miss such filing deadlines. In Singapore, companies which miss their deadline for filing annual financial statements are fined as much as S$600 (US$437), a relatively small sum.
Zilingo declined to comment. One venture capitalist, who asked not to be identified because of the dispute’s contentiousness, said it is not uncommon for startups to make late filings.
In Zilingo’s case, that failure to file contributed to challenges. After Covid-19 slashed the company’s revenues, it took two rounds of financing to fund operations. One was a US$25 million convertible note in late 2020 from Sequoia and state-owned investors EDBI and Temasek, while another was a near US$40 million mezzanine debt facility in mid-2021 from Varde Partners and Indies Capital Partners, according to people familiar with the company’s finances, who asked not to be identified because the details are confidential.
In March 2022, Varde and Indies told the firm it was in default of the loan agreement citing a wide range of documents it was yet to receive, including the audited filings from fiscal 2020 and fiscal 2021, ordering it to cease drawing on funds. By May, they recalled the loan, putting the company in a precarious financial position with little cash to continue operations. The board said on May 13 it had appointed an independent financial adviser to explore options for Zilingo.
‘It’s Not About Money’
Bose argued the investigation against her is an unfair effort to blame her for the company’s struggles. She said she has yet to see the full report of allegations against her, despite four interviews with Kroll.
She said she was asked to attend another meeting on May 19, but requested to delay it until the following week because she was relocating her family. The next day, she was fired with a termination letter she said cited several causes including insubordination, neglect, failure to produce relevant documents and refusal to comply with direction.
“I want an opportunity to talk about every single one of the allegations,” she said. “I was denied the opportunity, time and access to do so.”
Bose, now 30, pointed out that she hopes to have a substantial professional future, ideally working at startups with ambitious plans for the tech industry.
“I’m not going to live with a stain on my reputation and my career,” Bose said. “It’s not about money — it’s about my career, it’s about my reputation, it’s about my life, it’s about my parents.”
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