Sequoia India: “We will continue to have zero tolerance towards proven wrongdoing.”

Sequoia India, writing in a blog on Sunday, addressed recent media reports surrounding fraud and unethical practices at some of the startups in its Indian portfolio. In the context of its highly successful track record nurturing Indian startups that went on to become publicly listed companies, Sequoia stressed these organizations had embraced “the discipline and predictability expected by the public markets.” But Sequoia rued those days when it heard about breaches of integrity or ethics in its portfolio. (Sequoia)

Investigations are reportedly in progress at Zilingo, a fashion marketplace, over accounting issues; at BharatPe, founder Ashneer Grover and his wife are accused of siphoning company funds; and at Trell – charges of misinformation surrounding growth and usage stats, as well as siphoning. (Sequoia, however, did not name any startups in its blog.)

“This is the stuff that pains us deeply,” wrote the legendary venture firm. “And it’s time we speak about this.”

Action plan

Sequoia said it was in the business for the long term and held itself to a high bar on integrity. It stated its resolve to take proactive steps to take increased compliance at its portfolio companies:

• governance trainings for founders and senior management
• implementation of whistleblower policies
• more independent board representation
• asking for more disclosures and more rigorous adoption of internal audits and controls

“We will continue to have zero tolerance towards proven wrongdoing. We won’t hesitate to act to protect the interest of the company and employees, even if it costs us financially. We will take tough calls where needed in the interest of doing what is right,” Sequoia warned.

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