The complaint, filed with Mumbai Police’s Economic Offences Wing, lists charges of criminal misappropriation, cheating, and breach of trust against Bizongo, its senior executives, and investors.
Individuals named include Bizongo founders Sachin Agarwal and Ankit Tomar, CEO Prahlad Krishnamurthy, and investment firms Accel, B Capital, IFC, and Chiratae, along with their representatives — Souvik Sengupta and Arijit Sengupta of B Capital, Ranjith Menon (Chiratae), and Amit Jhunjhunwala (Accel CFO).
TradeCred has sought registration of an FIR under multiple sections of the Bharatiya Nyaya Sanhita, 2023, including those pertaining to 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, the company said.
According to TradeCred, Bizongo — registered as a seller on its platform since 2021 — raised funds by selling invoices representing receivables from its customers to buyers on TradeCred. These invoices were purchased at a discount by TradeCred’s registered investors, who profit by recovering the full dues, while the sellers 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 the designated escrow accounts as required contractually, TradeCred said in its complaint.
This, it claims, amounts to double recovery — enabling Bizongo to benefit from both upfront invoice financing and final customer payments — thereby defrauding TradeCred’s investors.
ET has reviewed a copy of the complaint.
Bizongo, B Capital and Chiratae did not respond to ET’s queries. Accel declined to comment.
Funds under dispute
TradeCred’s complaint states 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 stands at over Rs 81 crore.
The company further alleged that cumulative misappropriation 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.
- Using Rs 34.84 crore from customer collections to repay third-party financiers, including Capsave Finance, some of which allegedly benefitted key Bizongo personnel personally.
- Providing false assurances of a $10 million capital infusion by shareholders, which did not materialise as promised for settlements.
