The Investigation Into Swiggy’s Rs 33-Crore Corruption Complaint Against an Ex-employee Taken Over by the Karnataka CID

Nitin Konde

Oct 7, 2024 — 3 min read

The Investigation Into Swiggy’s Rs 33-Crore Corruption Complaint Against an Ex-employee Taken Over by the Karnataka CID

According to a media source, the foodtech giant Swiggy's cheating complaint against a former employee was recently forwarded to the Karnataka Crime Investigation Department (CID) for additional investigation. The investigation gained momentum once the business said that it discovered the former employee had conspired with 12 other individuals and businesses to steal from Swiggy.

Swiggy initiated legal action, according to a media report, following the discovery that a former employee had taken away INR 32.67 crore from the company over a period of time. Swiggy first filed a complaint with the Bengaluru Marathahalli Police Station and then assembled an outside team to investigate the situation. Given the amount involved, the Marathahalli Police Station officers transferred the case to the CID after starting an investigation.

Statement From Officials

Police officials stated that they had forwarded the case to the Crime Investigation Department because of the significant sum of money involved. They are currently looking into the matter.

A media outlet received confirmation from CID sources that they have taken over the case. According to a top official, "We are currently investigating, and there will be a breakthrough soon."

What Exactly Happened?

The former employee of Scootsy Logistics Private Limited, a subsidiary of Swiggy, and 12 other people were accused of stealing INR 32.67 crore over a period of time. On November 27, 2023, the FIR was filed. Swiggy's Scootsy purchases goods from one company and resells them to another.

Srikhara KM, the primary accused in this case, is accused of defrauding RPGS Associates, Swiggy's vendor, by fraudulently transferring INR 32.17 crore between August 2021 and February 2022, according to the cheating complaint filed by Scootsy Logistics, Swiggy's business-to-business (B2B) arm. The complaint further stated that throughout the period, an extra INR 50.06 lakh was transferred to other companies for unidentified work.

This means that throughout those roughly six months, Swiggy lost a total of INR 32.67 crore. Previously, Srikhara served as the finance manager and later the general manager of Scootsy, according to the FIR. RPGS Associates, Fresh Farm Agro Pvt Ltd, Acuity Stationery Pvt Ltd, First Choice Grocery Ltd, Amaxa Pharma Prvt. Ltd, Packingocity Pvt. Ltd, and "others" are among the companies included in the complaint.

Executives including Rasitha Prasad, Swara Prasad, and Chackingal Prasad Nair (directors of 360 Fresh Farm Agro Pvt Ltd), as well as Chakingal Prasad Nair (RPGS Associates), are named as co-accused in the FIR. A case has been filed by Indian Penal Code sections 34 (common intention), 408 (criminal breach of trust by employee), and 420 (cheating).

Shocking Development Before IPO

All of this is happening just as Swiggy is gearing up for one of the biggest initial public offers (IPOs) in India, which is set to take place later this year when it plans to go public on the stock markets. Swiggy intends to raise $1.25 billion, or INR 10,414 crore, in total.

Swiggy will issue new shares valued at INR 3,750 crore, while the offer for-sale component would be about INR 6,664 crore (comprising 18.53 crore shares). Swiggy submitted its first updated draft red herring prospectus with the Securities and Exchange Board of India (SEBI) on September 26.

According to previous media reports, the business is expected to boost the value of its IPO by INR 1,250 crore, or $150 million, bringing the total to INR 11,664 crore, or $1.4 billion.