Sequoia India: Algo’s Withdrawal Of Case Vindication Of Our Stand

Marquee investment firm Sequoia Capital India said on Thursday (December 1) that Algo Legal’s withdrawal of the INR 1 Cr defamation suit was a ‘vindication’ of its stand.

“Sequoia India has maintained throughout that all steps taken by it were based on detailed reviews and in the best interests of portfolio companies and various stakeholders. The claim of defamation was incorrect, and the withdrawal of the case is a vindication of this stand,” Sequoia was quoted as saying in an ET report.

Sequoia India said the case was withdrawn before it filed its response, and it denied any out-of-court settlement with Algo Legal.

The comments come a day after the law firm and its founder Sandeep Kapoor withdrew the lawsuit filed against the venture capital firm and several media outlets.

After the case was withdrawn, an Algo Legal spokesperson said, “We have decided to withdraw the defamation suit filed by us against the wholly unsubstantiated allegations made against Algo Legal and Sandeep Kapoor by various media houses.” 

Algo Legal added that it decided to move forward, “instead of being dragged through endless legal proceedings and defending against allegations which continue to remain baseless, unsubstantiated and hollow.”

It is prudent to mention that the VC firm had tried to get the case thrown out in June. 

Sequoia India had stated in the court filings that the message that it had sent out to its portfolio companies is the right to freedom of speech, in a 19-page response. It added that 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.”

The case was heard by the Bengaluru City Civil and Sessions Judge MH Annayyaanavar, who refused to grant an interim gag order on the articles about the law firm and its founder.

Sequoia India cut ties with Algo Legal in June 2022 after an investigation at one of its portfolio companies. In an email sent to its portfolio companies, Sequoia India said that after some ‘concerning incidents’ came to light, it terminated all services being provided by Algo Legal and its related entities. Sequoia advised portfolio founders to inform AZB & Partners if Algo Legal or related entities had any dealings with their companies.

Soon after media reports surfaced about the email, Algo Legal and Sandeep Kapoor filed lawsuits against publications Hindustan Times, and Times Of India parent Bennett Coleman And Company Limited (BCCL), as well as Twitter India, Sequoia Capital India and John Doe (a general injunction that could apply to any citizen in India).

Algo Legal was founded in 2019 by Kapoor after a nine-year stint at Sequoia India. It was earlier alleged that Kapoor took advantage of his earlier position as a senior executive at the VC firm to pressure the portfolio companies to hire Algo Legal for their legal work.

The law firm denied the allegations made by Sequoia India, stating that such baseless allegations made by the VC firm hurt its business and reputation.

Per Inc42 reports, Algo Legal was the advisor for Sequoia India-led funding rounds including CRED’s unicorn round in 2021 and Trell’s $45 Mn Series A round in 2020. Algo was also the firm managing the legal aspects during Zilingo’s layoffs in 2020. Trell and Zilingo have since come under investigation for corporate governance lapses.