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Sequoia considers auditing South Asia investments as lapses rise – Occasions of India

Sequoia Capital’s regional arm in South and Southeast Asia is weighing particular audits of a number of investments within the area following allegations of monetary irregularities at companies akin to Zilingo Pte and GoMechanic.
The enterprise capital agency will work with Ernst & Younger on a few of these audits and can improve finances allocations to assist investee firms put governance guardrails in place, in response to folks acquainted with the choice who requested to not be named discussing non-public data. Sequoia Capital India will even be extra selective when taking board seats at firms and, in some instances, would possibly exchange junior members from their workforce on boards with extra senior companions, the folks stated.
That’s a departure from earlier follow the place Sequoia restricted due diligence to firms earlier than investing, the folks added.
“As a matter of follow, Sequoia Capital India & Southeast Asia conducts due diligence forward of latest, first-time investments. We could conduct diligence forward of a follow-on spherical; at this juncture, we have now not put a mandate for particular audits,” a Mumbai-based spokesperson for the corporate stated in an emailed assertion.
Sequoia Capital India & Southeast Asia is the regional arm of the Silicon Valley fund that backed Apple Inc. and Google.
Within the newest headache for Sequoia Capital India, a due diligence run by EY on its portfolio firm GoMechanic for different potential traders had unearthed bookkeeping improprieties, missteps the startup’s co-founder accepted in a public assertion final week. The potential investor group that employed EY pulled out of talks to fund GoMechanic and knowledgeable Sequoia in regards to the lapses, Bloomberg Information reported final week.
Sequoia, which has been backing GoMechanic since 2019 and is its largest shareholder with a 27% stake, in response to Tracxn, was not conscious of the bookkeeping issues, it stated in a joint emailed assertion with different traders.
The India and Southeast Asia workforce had stalled saying the elevating of $2.85 billion throughout three funds by nearly a month, final yr, after alleged irregularities at a few of its portfolio companies, the folks stated.
Since beginning in India greater than 16 years again, Sequoia Capital India has broadened its geographical attain to Southeast Asia and invested in additional than 400 startups. BharatPe and Trell are amongst different firms backed by them which have confronted allegations of flouting guidelines.

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