Karnataka CID Takes Over Probe Into Swiggy’s Complaint Of INR 33 Cr Embezzlement

The Karnataka Crime Investigation Department (CID) has taken over the probe in a complaint filed by IPO-bound Swiggy against a former junior employee for defrauding the foodtech startup of nearly INR 33 Cr.

The case has been transferred to the Karnataka CID, with investigation underway and a breakthrough expected soon, Moneycontrol reported, citing sources within the department. The probe was initiated at the Karnataka’s Marathahalli Police Station but was transferred  to the CID given the sum involved.

In its updated draft red herring prospectus (DRHP) filed with market regulator SEBI, Swiggy said that during the fiscal year 2023-24 (FY24), it found that a former employee embezzled INR 32.67 Cr from the company’s business-to-business (B2B) arm, Scootsy Logistics.

The matter dates back to November 2023 when Scootsy filed a police complaint against a former junior employee and at least a dozen of its vendors, alleging that they colluded to embezzle INR 32.67 Cr between August 2021 and February 2022.

Last month, it was reported that Swiggy lodged a legal complaint against the employee involved in misappropriation of funds and set up an external team to look into the matter.

As per the first information report (FIR) accessed by Moneycontrol, Srikhara KM has been identified as the prime accused in the case. He reportedly served as financial manager and general manager at Scootsy when he fraudulently transferred INR 32.67 Cr to RPGS Associates — one of Swiggy’s vendors.

Several other vendors of Swiggy, such as Fresh Farm Agro, First Choice Grocery and Packingocity, along with their executives, are co-accused in the case, as per the report.

The development comes at a time when Swiggy is facing a double whammy of potential GST liabilities of over INR 326 Cr and accusation of engaging in child labour ahead of its public listing.

Meanwhile, earlier today, the startup received the approval from its shareholders to increase the size of fresh issue of shares in its IPO to INR 5,000 Cr. 

Over the last few weeks, investors have made a beeline to buy Swiggy shares in hopes of making hefty profits after the company makes its Dalal Street debut.

Ahead of the highly-anticipated IPO, US-based asset manager Invesco marked up the foodtech major’s valuation to $13.3 Bn, a 25% jump from the last fair value recorded by the investor.