Sequoia Capital: Sequoia cuts ties with legal firm citing ‘concerning incidents’ in probe findings

Bengaluru/Mumbai: Venture capital fund Sequoia Capital has shot off a note to its portfolio companies, saying it has stopped working with law firm Algo Legal post an investigation at one of its investee firms, multiple people who have received the email told ET.

In the communication sent out this week, the VC fund told companies that it has found “concerning incidents” involving Algo Legal, a service provider associated with a former Sequoia India employee, and related parties. A recent investigation at a portfolio firm also brought “concerning details” to light about the legal firm, it said.

Sequoia also advised founders that if Algo Legal or its related entities had any dealings with their companies they should inform AZB & Partners.

This comes soon after Sequoia Capital stalled the closing of its $2.8-billion India and Southeast Asia Fund due to an ongoing investigation at one of its portfolio firms, as
reported by ET on May 18.

“All LP (limited partner) subscription documents have been received. However, during the past weeks, shareholders in a company portfolio have received information about a potential misconduct, requiring investigation. Given these events, we have decided to postpone the close date of the funds,” Sequoia had told its limited partners last month. “We will provide you with an update when our work is complete.”

Algo Legal is a law firm founded by former Sequoia Capital general counsel Sandeep Kapoor. He had worked at Sequoia for nearly nine years and had left the VC fund in 2018, as per his LinkedIn profile.

When contacted, Kapoor said he wasn’t aware of any email sent by Sequoia Capital India and SEA on Algo Legal to their portfolio companies.

“In fact, we are not even aware of any probe that you refer to in your question. Sequoia has not formally or informally informed us of any probe of any sort,” he said in an emailed response to ET.

Sequoia Capital India and Zilingo didn’t comment on the note related to Algo Legal.

Kapoor’s name was not specifically mentioned in the email Sequoia sent to a select group of portfolio companies. ET has seen the mail.

The note comes soon after Sequoia-backed troubled fashion startup Zilingo fired its chief executive Ankiti Bose last month following a probe on alleged financial irregularities at the firm.
Bose had told ET in an interview, after her removal from the company, that her termination is not the end of the ongoing saga at the Singapore-based Zilingo.

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