Sequoia India on Sunday said it will continue to respond strongly when it encounters wilful misconduct or fraud.

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The company's statement comes in backdrop of the the recent controversy at BharatPe, of which Sequoia is the largest shareholder. Recently, Ashneer Grover, BharatPe's co-founder, was sacked from his role.

BharatPe, which allows shopowners to make digital payments via QR codes, first sacked Grover's wife Madhuri Jain for alleged misappropriation of company funds, following which Grover resigned. The company then stripped him of the co-founder and other titles over alleged "extensive misappropriation of company funds" by "creating fake vendors" to siphon money and using "company expense accounts" to "enrich themselves and fund their lavish lifestyles." Grover has denied any wrongdoing.

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"We will have zero tolerance towards proven wrongdoing. When whistleblowers call us to report on issues, we always take them seriously," the company said in a statement.

The company added that it won't hesitate to act to protect the interest of shareholders and employees even if it costs them financially. "We will take tough calls where needed, in the interest of doing what is right," it added.

"We reflect what we could have done to prevent situations of fraudulent behaviour. We can build enduring companies only if values are right and governance is strong," the company said.

There is hardly a business to diligence at the seed stage, Late stage investors can face negative surprises, if there is wilful fraud, it said.

"We are still a "work-in-progress" as an ecosystem and we have to collectively drive better accountability," it said, adding that boards can only work with the information shared with them.

The company said that the less transparency to the board, the lesser their ability to truly unearth errant behaviours.

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The company said better corporate governance is a shared responsibility between founders, the management and the Board.

"We need better governance trainings, whistleblower policies, more independent board representation, more rigorous adoption of internal audits and controls," it said.

With PTI inputs

First Published:Apr 17, 2022 6:00 PM IST