StayZilla Co-founder Yogendra Vasupal arrested on vendor’s complaint

“(We) have proof that these guys have siphoned money from the company accounts into their personal accounts (not Salary) and into accounts of their own family members who hold no position in the company”

The startup industry in India today woke up to the shocking news of the arrest of Yogendra Vasupal, Co-founder and CEO of StayZilla, a now defunct home-stay company based in Chennai. The Chennai police arrested him on a complaint filed by city-based media agency Jigsaw Advertising for “cheating and intimidation”.

A few hours into his arrest last night, an article was posted by his wife and StayZilla COO Rupal Vasupal, in which he alleged that the charges levelled against him are fabricated and that the startup did not owe money to the agency, even though there is a dispute existing between the two firms.

In the article titled ‘Help, I need everybody’ on Medium.com, Vasupal also narrated a an  incident in which his former landlord verbally abused him and assaulted one of his team members during a meeting with him in Bangalore. He has alleged that the current regulatory framework and corruption “does not let one pick up after they fall. Instead it works overtime to bury them.”

“I want to bring to light the problems that me and Sachit (StayZilla Co-founder Sachit Singhi) are facing. We are also seeking any help that you have to offer. I had announced that Stayzilla will be rebooting its operations on Feb 23rd. While things are progressing well with respect to the reboot (more on that later), I have realized that while we all want India to Start-up and Stand-up, the regulatory framework + corruption does not let one pick up after they fall. Instead it works overtime to bury them.”

According to Vasupal, “the case against us from a media agency with whom the company had a dispute over deficiency of services and to whom we had asked to take it up in court”.

“..On March 9th, 2 policemen in Bangalore came home in mufti and stated that I am wanted in the station for questioning. I called my lawyer immediately and was informed by him that if there wasn’t a summons or a warrant, I don’t have to go. I got back to the cops whom I seated at my home and informed them of the same. I then asked them for more information on the reason they wanted me. I was told that there is a case against me by somebody from Chennai for cheating, intimidation and etc.

I recognized the name of the complainant and informed them that there was a dispute between 2 companies and we had asked the other company to take it up in the court. I don’t personally owe anybody money and I am wondering how can they get confused on such a basic matter as this was a clear civil case. I also pointed out that we have been asking the other company to take it to court if they felt they were wronged as we felt within our right. I also pointed out that my company is also owed close to 7 crores from various debtors but I am not going around filing false criminal cases against them.”

However, Jigsaw rejected Vasupal’s claims and accused Stayzilla’s founders of committing fraud, including embezzlement of funds.

“(We) have proof that these guys have siphoned money from the company accounts into their personal accounts (not Salary) and into accounts of their own family members who hold no position in the company,” Jigsaw’s Aditya CS said in an email sent to Mint.

Meanwhile, Vasupal’s arrest sparked outrage across the startup industry in India, with VCs and startups calling for his immediate release. Girish Mathrubootham, CEO of Chennai-based Freshdek, said he had already contacted local authorities to secure his release.