The complaint, filed with Mumbai Police’s Economic Offences Wing, outlines charges of criminal misappropriation, cheating, and breach of trust against Bizongo, its senior executives and investors.
Individuals named in the complaint include Bizongo founders Sachin Agarwal and Ankit Tomar, the company’s CEO Prahlad Krishnamurthy, investment firms Accel, B Capital, IFC, Chiratae. Souvik Sengupta and Arijit Sengupta of B Capital, Ranjith Menon (Chiratae) and Amit Jhunjhunwala (Accel CFO) have also been named.
TradeCred has sought for registration of an FIR under multiple sections of the Bharatiya Nyaya Sanhita, 2023, including criminal conspiracy, breach of trust, cheating, and fraudulent concealment of assets.
It has also initiated proceedings under the Negotiable Instruments Act for cheque dishonour. Each affected investor has authorised TradeCred to pursue legal remedies on their behalf, TradeCred noted.
According to TradeCred, Bizongo—registered as a seller on its platform since 2021—raised capital by selling invoices to buyers on the TradeCred platform. These invoices, which represented receivables from Bizongo’s customers, were purchased by TradeCred’s registered investors at a discount.
This process entails companies selling their invoices—dated to be recovered at a later date—at a discount to financial services companies or to individual clients through platforms such as TradeCred and KredX. The buyers of these invoices make a profit by purchasing them at a discount and recovering full dues for it. The sellers of these invoices gain immediate access to capital.
However, despite receiving funds from these investors via a controlled escrow mechanism, Bizongo allegedly collected the actual payments from customers directly into its own bank accounts rather than routing them through designated escrow accounts as contractually required, as per TradeCred’s complaint.
This, the complainant claims, constitutes a double recovery—where Bizongo benefitted from both upfront invoice financing and the final payment from customers—thereby defrauding TradeCred’s investors.
ET has reviewed a copy of this complaint.
Bizongo, B Capital and Chiratae did not respond to ET’s queries.
A spokesperson for Accel India in response to email queries said it has not received any formal communication on the complaint filed by TradeCred with the EOW. “Accel did not hold a board seat at Bizongo in July 2024 and is not involved in the company’s day-to-day operations. Amit’s (CFO at Accel) role was limited to participating in such meetings as investor representative with an objective to resolve the matter—he was not a decision maker,” the spokesperson added.
Funds under dispute
TradeCred’s complaint outlines that a total of Rs 69 crore remains unpaid to its investors, who had purchased the invoices on its platform.
Including penalties and overdue charges, the total claim amount stands at over Rs 81 crore.
TradeCred also alleged that the cumulative misappropriation over time could be as high as Rs 123 crore, based on its audit of Bizongo’s bank records and customer payments.
Timeline of events
TradeCred began noticing irregularities in mid-2024, when Bizongo allegedly started defaulting on its obligations despite repeated assurances and payment plans. Key points outlined include:
- Default beginning November 2024, following partial payments during August-October.
- Issuance of undated cheques worth Rs 40 crore by Bizongo, four of which were dishonoured.
- Attempts to settle dues through alternate arrangements, including assigning receivables from risky customers, many of whom were classified as non-performing assets (NPAs) or were undergoing insolvency proceedings.
The complaint further accuses Bizongo of deliberately winding down its supply chain finance business after July 2024 to divert funds to other verticals.
Prior red flags
Bizongo had come under scrutiny last year as well for potential irregularities in financial controls flagged by its auditor.
This had led to several of the company’s board members and senior executives resigning from their positions. Cofounder Sachin Agrawal had also stepped down as CEO following a board-instituted investigation, and was replaced by Krishnamurthy.
The developments had led to Bizongo shutting down its supply chain financing business, which is now under question.
