Gurgaon-based Clues Network that runs online marketplace ShopClues whose founder and CEO Sandeep Aggarwal was arrested by The Federal Bureau of Investigation (FBI) earlier this week, said the case involving Aggarwal relates to events that occurred prior to ShopClues’ inception and therefore does not involve the business of ShopClues. However, investors refrained from commenting about the development or how it may affect the company’s operations.
As per a company statement, it continues to register ‘robust growth’. “We shall continue to provide best-in-class services to our customers, merchants and stakeholders. ShopClues continues to register robust growth and the company is processing close to 10,000 orders daily or a run rate of 3.5 million order per annum. The number of products sold at ShopClues increased to 1.8 million SKUs with total listed merchandise value of more than Rs 4500 crore, making ShopClues amongst the leading and most diversified e-commerce companies in India,” Sanjay Sethi, co-founder, ShopClues said in the statement.
“The charges contained in the complaint are merely accusations; the defendant is presumed innocent unless and until proven guilty. Aggarwal is cooperating with the investigating agencies and has complete faith in the US judicial system. The entire staff and management of ShopClues are behind Aggarwal at this juncture. The case relates to events that occurred prior to ShopClues inception, and therefore does not involve the business of ShopClues,” stated the release.
Aggarwal was arrested by FBI on insider trading charges. He was a Wall Street analyst prior to starting ShopClues and according to FBI, he allegedly tipped off Richard Lee, a portfolio manager at hedge fund SAC Capital about a pending deal between Microsoft and Yahoo. He was arrested in San Jose earlier this week when he was visiting the US. Media reports suggest that he is out on bail and the hearing will start on August 2 at a New York court.
Founded in 2011 as a managed marketplace e-tailer, ShopClues is backed by high-profile investors and PE funds. In March this year, it raised a Series B round of $10 million (Rs 54.1 crore) from Nexus Venture Partners, Helion Venture Partners and Netprice.com, a Japanese business group based in Tokyo. Earlier, Nexus Venture Partners led a $4 million Series A round for ShopClues that also saw the participation of an unnamed Asia-based VC investor.
We tried to contact Nexus Venture Partners and Helion Venture Partners. While Nexus Venture Partners declined to comment on the issue, Helion Venture Partners did not respond to our calls or emails. An email has been sent to Netprice.com as well. We shall update the post if we receive any comments.
(Edited by Joby Puthuparampil Johnson)