Earlier this year the media and digerati are debating the merits and pitfalls of the case against the CEO of the online homestay and alternate-stay aggregator Stayzilla that declared it was shutting down. The story began to unfold on Feb 23 2017 when the CEO Yogendra (Yogi) Vasupal took to Medium to blog that “Stayzilla will reboot its operations” (link to writeup).
Now comes news of arrest of co-founder of Eat, Shop Love, a Bengaluru based startup who allegedly duped several firms. Oindrilla Dasgupta (facebook) is being held by the police on charges of cheating. The 30-year-old brand entrepreneur and mother, Oindrilla Dasgupta, set up Eat. Shop. Love. as an online forum where women can snap up curated collections of apparel, jewellery, soaps, and chocolates, among other products. (link).
N Satheesh Kumar, joint commissioner of police (crime), said cybercrime police of the Central Crime Branch summoned Oindrila for questioning on Thursday in connection with a case filed by Shayak Sen who alleged that she had misused his bank account details to collect lakhs of rupees from several people.
Oindrila was arrested in Delhi in another case, after which the cyber crime police arrested her for frauds she had allegedly committed in Bengaluru. She was was arrested in Bangalore on Friday for allegedly cheating at least eight persons and business firms of over Rs 64 lakh. (about $100,000). The fraud came to light when police were probing a complaint filed by her husband Shayak Sen.
“The initial probe confirmed she had committed the offence and hence we arrested her and produced her before the court on Friday. The court remanded her in judicial custody,” Satheesh Kumar said.
Digirati and the tech community hold startup founders and entrepreneurs to a much higher standard. Wrongdoing by leaders of this close-knit community is sure to make headlines. The arrest raises similar questions as before: How do investors and others hold startup founders accountable?
We need to begin treating startups as ‘small businesses.’ What this means is simple: startup founders are business-men/women who must abide by common business principles. They need to be governed by the laws and regulations like other small businesses.
In this example, if the facts are correct, law will take its own course. Issuing post-dated checks that are not cashable amounts to fraud, which the person operating the account needs to be held accountable for.
Bottomline: We may not need new regulations to govern startups but rather apply existing rules and regulations to manage them.