GoMechanic founders, officials booked for ‘cheating, forging documents’ by Delhi Police EOW

The company did not respond to an email seeking a response to the allegations against its founder-directors.

The complaint was lodged on behalf of three venture capitalists who invested more than Rs 211 crore in the company from 2017-21. The investors — SCI investments, Orios, and Chiratae Ventures — alleged falsification of the books of accounts and financial records of the company.

“Between 2017 and 2021, we/the Investors invested in the company. As is typical in such transactions, these investments were made on the basis of a review of the documents that were provided by/under the instructions of the accused founder-directors. The accused founder-directors represented that the company had high growth potential by producing books of accounts and other financial records which showed healthy business activity and revenues,” the FIR read.

Over time, the complainants alleged, a review or audit was conducted at their instance before funding but the accused directors gave “fudged and incorrect” data.

The FIR further states, “We/Investors wish to inform you that we have recently discovered that the accused persons had fabricated and falsified the books of accounts and financial records of the company that were presented to us in order to dishonestly and fraudulently induce us into investing in the company between 2017-2021.”
The complainants alleged they had confessions and recorded admissions of the accused with them and demanded an investigation into their funding.

“A thorough investigation is required to unearth the extent to which such financial records were cooked up and falsified, but the accused persons have admitted and confessed that they had inflated and manipulated ‘revenue figures’ in order to mislead us (the Investors) to induce us into investing… Instead of using our investment of over Rs 200 crore towards the legitimate business activity of the company, the accused have fraudulently abused their authority as directors, agents, and employees of the company to commit criminal breach of trust by diverting and siphoning the capital/funds for personal and ulterior uses.”

The complainants also accused the directors of forging bank records to keep investors in the “dark” about their true financial position.

On January 11, 2023, police said Bhasin and Karwa visited Sequoia Capital India LLP’s office in New Delhi and allegedly “confessed” to its representatives that there had been “over-reporting of revenues” and “under-reporting of expenses” in the company. Police said they are verifying such allegations.

“The company had outstanding debt obligations of Rs 78.63 crore to financial creditors, out of which other obligations (including statutory dues) amount to Rs 6.91 crore,” read the FIR.

Police said the complainants also provided them with a trail of emails that show the company “fudging” numbers.

“(One of the) emails contains a ‘portfolio report’ which shows a positive balance of Rs 19,92,09,071 as of 29.07.2022 in the company’s Current A/c No. 8011985842 with Kotak Bank. However, upon verification, it has been found that the actual bank balance in this account as of 28.07.2022 was a negative balance of Rs 9,99,07,817.86 and the next entry is on 31.07.2022 showing a negative balance of Rs 10,08,33,055.86. This is a clear instance of forgery of bank

statements by the accused,” read the FIR.