Karnataka CID takes over probe into Swiggy’s Rs 33-crore graft complaint against ex-employee

A case has been registered under IPC sections 34 (common intention), 408 (criminal breach of trust by employee), and 420 (cheating)

The cheating complaint that foodtech major Swiggy filed against a former employee was recently transferred to the Karnataka Crime Investigation Department (CID) for further investigation, people aware of the developments told Moneycontrol.

The case gathered pace after the company said it found that the former staffer colluded with 12 other people and firms to defraud Swiggy, they added.

On September 6, Moneycontrol had first reported that IPO-bound Swiggy had initiated legal action after it found that a former employee had embezzled Rs 32.67 crore  from the company over a period of time. Swiggy had set up an external team to look into the matter and then filed a complaint with Marathahalli Police Station in Bengaluru.

Moneycontrol has reviewed a copy of the first information report (FIR).

The officers at Marathahalli Police Station initiated the probe but transferred the case to the CID given the sum involved.

“Since the amount is substantial, we have referred the case to the Crime Investigation Department. They are now investigating the case,” a police officer privy to the matter told Moneycontrol.

CID sources confirmed to Moneycontrol that the case has been transferred to them. "We are now investigating, and there will be a breakthrough soon," a senior official said.

Moneycontrol has reached out to Swiggy. The story will be updated once the company responds.

Who did what?

Scootsy Logistics Private Limited, a subsidiary of Swiggy, filed a complaint against its former employee and 12 others who together embezzled a total of Rs 32.67 crore over a period of time. The FIR was registered on November 27, 2023.

Swiggy’s Scootsy buys products from one business and sells to another.

According to the cheating complaint filed by Swiggy’s business-to-business (B2B) arm Scootsy Logistics against Srikhara KM, the main accused in this case, it is alleged that he fraudulently transferred Rs 50.06 lakh between August 2021 and February 2022 to RPGS Associates, which was Swiggy’s vendor.

The complainant also mentioned that an additional Rs 32.17 crore was transferred to other companies over the time period for unspecified work.

This amounts to a total loss of Rs 32.67 crore suffered by Swiggy over those six months or so.

Srikhara was earlier finance manager at Scootsy, as per the FIR. The complaint also named firms like RPGS Associates, Fresh Farm Agro Pvt Ltd, Acuity Stationery Pvt Ltd, First Choice Grocery Ltd, Amaxa Pharma Prvt. Ltd, Packingocity Pvt. Ltd and ‘others’ in the FIR.

The FIR also mentions executives such as Rasitha Prasad, Swara Prasad (directors of 360 Fresh Farm Agro Pvt Ltd), Chackingal Prasad Nair and Chakingal Prasad Nair (RPGS Associates) as co-accused in the case.

A case has been registered under sections 34 (common intention), 408 (criminal breach of trust by employee) and 420 (cheating) of the Indian Penal Code.

A snapshot of events

IPO ahead

These developments come at a time when Swiggy is preparing to list on the stock exchanges later this year in one of India’s largest initial public offerings (IPOs). Swiggy plans to raise a total of Rs 10,414 crore or $1.25 billion, as reported by Moneycontrol earlier.

Swiggy, which filed its first updated draft red herring prospectus with the Securities and Exchange Board of India (SEBI) on September 26, will issue fresh shares worth Rs 3,750 crore while the offer for sale component will be around Rs 6,664 crore (comprising 18.53 crore shares).

The company is likely to increase its IPO size by Rs 1,250 crore, or $150 million, taking the total to Rs 11,664 crore or $1.4 billion, Moneycontrol had reported earlier. The decision will be taken at the company’s extraordinary general meeting on October 3.

Also read: IPO-bound Swiggy sees losses widen to Rs 611 cr, despite 36% surge in Q1 revenue

Swiggy’s decision to upsize its IPO comes at a time when there is increased competition from Zomato, Zomato’s Blinkit, Zepto, Tata's BigBasket, Flipkart Minutes and others in the quick commerce and food delivery space.