New Delhi: This week, a famous technology startup CEO was arrested by the police who charged him with defrauding investors of close to 160 crore. The arrest has been a shocking news to the startup world more so the fact that the company had previously been regarded as an emerging high growth start-up in the Indian tech sector.
The CEO, according to the authorities, falsely reported business growth, customer numbers, and financial statements to lure money out of investors. Most investors thought that the startup was making lots of profit but the investigations done later revealed that the company had long been operating at a loss.
According to the police sources, the CEO spent investor funds on his personal luxury, such as spending on luxurious cars, overseas traveling, and costly apartments. The money was transferred to personal accounts in large volumes instead of being used in business development. When investors began posing questions regarding delayed returns the CEO was said to avoid meetings and to provide vague responses.
Multiple angel investors and small venture capital companies have brought forward complaints, claiming that they believed the founder due to his good image in the public and media coverage. There are also investors who alleged that they were presented with fabricated contracts and tampered bank statements when they were raising funds.
There is an in-depth investigation undertaken by the Economic Offences Wing. Authorities are inspecting company email, bank transactions and company internal documents. The CEO has been taken to the police to be further interrogated.
