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Sequoia India asks court to dismiss lawsuit by its former counsel


© Reuters. FILEPHOTO: This illustration shows the Sequoia Logo, which was taken on June 13, 2022. Image taken June 13, 2022. REUTERS/Dado Ruvic/Illustration

Aditya Kalra & M. Sriram

NEW DELHI, (Reuters) – Sequoia Capital India asked a court in India to dismiss a lawsuit for defamation filed against one of its former general attorneys. The firm claims that the suit was an attempt by Sequoia Capital India to limit its freedom speech rights and to harm its interests. According to the court filing, Sequoia Capital India’s request.

After Sandeep Kapoor included Sequoia in a lawsuit against media companies for reporting on the Sequoia emails of June 2, he has now locked himself in legal trouble with Sequoia. From 2009 to 2019, Kapoor served as Sequoia’s general counsel.

Sequoia’s latest lawsuit comes after a string of difficulties for the company, which has had to deal with startup complaints about the damage trust caused by high-profile governance issues at portfolio companies in India or Southeast Asia.

Algo Legal and Kapoor have stated that Sequoia sent an e-mail to its portfolio companies in late March making numerous references to “concerning detail” and that this email caused damage to their business and reputation.

Sequoia refuted the allegations in 19-page court filing filed by the Indian tech hub Bengaluru on June 18. The lawsuit was “frivolous, vexatious”, and Sequoia stated that it had a duty to inform portfolio companies about irregularities it discovered.

Zilingo, a Sequoia Capital-backed fashion start-up in Singapore that was funded by Sequoia Capital, discovered certain payments to Algo, and related entities, which led Sequoia Capital to warn its portfolio companies against dealing with this law firm.

Sequoia has filed a filing that Reuters saw but has not been published.

A spokesperson for Algo and Kapoor said on Sunday they told the court on Saturday the investigation into Zilingo’s affairs is ongoing and there was no final finding, and that Sequoia’s allegations in the filing were without merit.

Sequoia detailed the Zilingo probe’s findings first hand. Sequoia stated that it discovered Algo, its subsidiaries and fashion startups paid more than $6 million between 2020-2022.

In such circumstances, Sequoia said, its “right to freedom of speech prevails over the plaintiff’s right of reputation since the statement was issued without any malice and without any intention to defame.”

Sequoia had been Algo’s most important client for billings. But, in January the U.S. venture-capital firm cut ties with Algo. Sequoia declined comment to the court filing on Sunday.

Next hearing will be at Bengaluru’s court on June 29.

In April, Zilingo suspended Ankiti Bose (30 years old) and its cofounder, Ankiti Bose (a former Sequoia analyst). The suspension was based on suspicions of financial irregularities. Bose was then fired in what she claimed was an unfair termination.

On Sunday, Zilingo and Bose didn’t immediately reply to our request for comment.

Zilingo stated previously that Bose’s dismissal was the result of an independent investigation into claims about “serious irregularities in financial management”.