Yogendra Vasupal, the Founder and Chief Executive of the now shuttered hotel room aggregator Stayzilla, has been taken into custody by Chennai’s police commissioner after advertising firm Jigsaw Advertising slapped charges of fraud against the company. He is currently locked up in the Puzhal Central Prison.
Vasupal, who had shut Chennai-based Stayzilla last month, was arrested in the Tamil Nadu capital on complaint by Jigsaw over pending dues of Rs 1.7 crore.
According to Rupal Yogendra, co-founder Stayzilla and wife of Vasupal, he was taken to the magistrate around 10 pm.
The issue became public when an emergency email by co-founder Sachit Singhi to investors Nexus Venture Partners and Matrix Partners asking for ‘help’ was made public on social media.
Co-founder gets anonymous veiled threats
Singhi himself had received veiled threats to his family. According to a blog post earlier written by Vasupal, Sachit got some scary dolls delivered to his home on March 9 with the image of his son.
Stayzilla office was rented. After disclosures to the landlord that the company will be shutting down, disputes arose. In a video posted by Stayzilla, a man is seen allegedly seen assaulting one of Stayzilla's staff.
Vasupal said that the dispute with Jigsaw Advertising was because of a severe deficiency of services, even though Stayzilla had already paid it about Rs 6.5 crore.
“The dispute began with a “severe deficiency of services” and we have repeatedly asked the other party to go to court if they felt there was anything wrong,” he said.
There were also veiled threats over phone by the vendor and Vasupal, uploaded the same on soundcloud here.
Support from startup investors and CEOs
Various startup CEOs and investors from firms such as Matrix Partners, MobiKwik, Freshdesk and others have come forward to expressed support for Vasupal on social media.
Vasupal pointed the deficiencies in the system when a company tried to wind down operations in India. About 90 percent startups fail in the country; however, winding down is a painful procedure which can take up to three years.
“There is no use of having jumped so many hoops to be a private limited company thinking that it will limit individual liability, when people at senior levels in police don’t even understand the difference…or can pretend not to know it,” Vasupal said, in the blog which was saved as draft and published today by his wife.
He remains in custody.
Vasupal's wife Rupal Yogendra told Moneycontrol: "What should have at the max been a civil court case is turned into something else altogether. Being treated as criminals for years of an earnest effort to run a Pvt Ltd. Please note that Yogi has not confessed to any of these false allegations despite all day's grilling at the station yesterday. Family in distress. Prayers needed."
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