Zilingo, a fashion and lifestyle marketplace, is currently in the news for the wrong reasons. According to a report by The Economic Times, one of its co-founders, Ankiti Bose, had given herself a tenfold salary hike without the approval of the board of directors.
Ankiti Bose, who co-founded Zilingo with Dhruv Kapoor in 2015, is said to have increased her salary from around $13,000 per month to $135,000 per month in 2019. The salary hike, which was given to Bose at a time when the company was making losses, did not have the approval of the board of directors or the company’s shareholders, according to sources cited in the report.
The report also claimed that the company had made a net loss of around $32 million in 2019, and the unapproved salary hike was one of the reasons behind it. The company’s board of directors reportedly took note of the salary hike and asked Bose to take a pay cut, but it is unclear whether the pay cut was implemented or not.
Zilingo is one of the most high-profile startups in Southeast Asia and has been backed by investors such as Temasek, Sequoia Capital, and SoftBank. The company has raised over $300 million in funding and was valued at around $1 billion in its last funding round in 2018.
The report has come as a shock to the startup ecosystem in Southeast Asia, where Zilingo is seen as a poster child for the region’s burgeoning tech scene. The incident has raised questions about corporate governance and the role of founders in startups, and has prompted calls for greater transparency and accountability in the startup ecosystem.
In a statement to The Economic Times, Zilingo said that it has “complied with all legal and regulatory requirements” and that the company’s financial statements have been audited by a “well-known” auditor. The company also said that it has “invested significantly” in improving its governance practices and that it is “committed to upholding the highest standards of corporate governance.”
The incident at Zilingo is not the first time that a high-profile startup has been embroiled in a controversy over corporate governance. In 2017, Uber’s board of directors was forced to oust its founder and CEO, Travis Kalanick, after a series of scandals that raised questions about the company’s corporate culture and ethics.
The incident also highlights the importance of having a robust board of directors and independent directors in startups. While founders are often the driving force behind startups, it is important to have a system of checks and balances to ensure that the company’s interests are protected.
The startup ecosystem in Southeast Asia is still in its infancy, and incidents like this serve as a reminder that there is still a long way to go in terms of corporate governance and accountability. However, with greater awareness and attention being paid to these issues, it is hoped that the ecosystem will mature and evolve to a point where such incidents become less common. With strong support from investors, robust regulatory frameworks and the right mindset, Southeast Asia can be an attractive destination for startups to grow.
In the meantime, Zilingo will have to work hard to regain the trust of its investors and stakeholders. The company has already taken steps to address the issue by appointing a new CEO and CFO earlier this year. Whether these steps will be enough to restore confidence in the company remains to be seen.
Despite these challenges, there are many encouraging signs in the region that suggest a bright future for startups. Governments across Southeast Asia have been taking steps to nurture entrepreneurship and promote innovation.
