Yogendra Vasupal, the Founder and CEO of currently defunct hotel-aggregator startup Stayzilla was arrested on March 14 by Chennai police on multiple charges, including those of fraud. Startups and industry-organisations denounced Vasupal’s arrest after a blogpost written by him alleged harassment by a vendor company over non-payment of dues.
In a blogpost published after Vasupal’s arrest, the entrepreneur has alleged that he was being harassed by his landlord and an advertising agency. Providing a video and an audio clip as evidence, Vasupal said that their landlord, who is a local politician, had harassed and threatened to shoot his administrative staff on February 9 when they tried to work out the payment of rent for their Bangalore office. Speaking about the problems with Jigsaw Advertising, Vasupal said the company had already paid it about Rs 6.5 crore.
Vasupal has also alleged intimidation by Chennai-based vendor company Jig Saw Solution and Advertising for non-payment of dues. He claimed the non-payment of dues was due to a dispute that ‘began with a “severe deficiency of services”‘. “The stark difference in the approach taken by the police in these two cases [civil/criminal] should tell you something important,” Vasupal said in the blogpost, pointing out delays over filing an FIR against his landlord and the speed with which the case was lodged against him in Chennai by Jig Saw.
However, Jig Saw proprietor Aditya CS has told Newsminute that Stayzilla had never conveyed any information about the alleged “severe deficiency of services” to them. Aditya told Business Standard that Stayzilla had cheated his company of Rs. 1.72 crore. “How long will advertising agencies and media houses bear losses because of irresponsible wannabe entrepreneurs who manage to get funding just to live a five-star life for a few years and then finally shut shop and expect hardworking business people to suffer?” he told the paper in an email. He also claims to possess proof of Stayzilla members siphoning money from company accounts to their personal ones as well as accounts of their family members who allegedly have no position in the company.
Vasupal’s bail application is to be heard on March 16. The Chennai chapters of TiE (The Indus Entrepreneurs) and NASSCOM (National Association of Software and Services Companies) has so far rallied behind Stayzilla. “This reflects poorly on the law and order situation in the state. The case is a civil case and it is a matter of payment not having been made to vendors,” P Narayanan, President, TiE Chennai, said.
Karnataka IT Minister Priyank Kharge has also asked his counterpart from Tamil Nadu to intervene. “Spoke to Dr. Manikandan, IT Minister for his intervention in @stayzilla case, I am sure he will help if @YogiVasupal is on right side of law (sic),” Kharge said in a tweet on March 15.