PremiumSequoia Capital India has requested that a local court dismiss a defamation suit brought by Sandeep Kapoor, one of its former general counsels.
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Sequoia Capital India has urged a local court to dismiss a defamation action filed by one of its former general counsels, claiming that it was an attempt to limit the venture capital firm's free speech rights and hurt its interests. Sequoia's filing, seen by Reuters, has not been made public.
After Sandeep Kapoor named Sequoia in a defamation lawsuit against media businesses that reported on a leaked Sequoia email from June 2, the company has been embroiled in a legal dispute with him. Until 2019, Kapoor worked as Sequoia's in-house general counsel for over nine years. On June 18, Sequoia Capital submitted its response to Algo Legal and its founder Sandeep Kapoor's ₹1 crore defamation complaint.
In a press statement and complaint, Kapoor's firm, Algo Legal, claims that Sequoia sent an email to its portfolio businesses last month that made unfounded allusions to "concerning details" about the law firm, harming its business and reputation.
Sequoia refuted the charges in a 19-page court filing on June 18 in Bengaluru, India's IT hub, calling the action "frivolous and vexatious" and claiming that it was required to notify its portfolio businesses when it discovered certain anomalies.
Sequoia has been dealing with complaints from startups about broken confidence as a result of high-profile governance crises at some of its portfolio businesses in India and Southeast Asia, and this case is the latest in a string of setbacks.
An independent probe at Sequoia Capital-backed fashion startup in Singapore, Zilingo, found certain payments made to Algo and its related entities "were not in consonance with the engagement terms/contracts", forcing Sequoia to caution its portfolio companies from dealing with the law firm, the court filing states.
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.
Detailing the Zilingo probe's findings for the first time, Sequoia said it found the fashion startup paid Algo and its related entities more than $6 million between 2020 and 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 Capital was Algo's largest billings client, but the US venture capital firm severed its relationship with Algo in January. Sequoia declined to comment on its court petition on Sunday. The case will be heard again in Bengaluru on June 29.
(With Reuters inputs)
