Amit Bhasin, the founder of GoMechanic, has acknowledged financial reporting problems at the Sequoia-funded start-up for auto maintenance that the cash-strapped business will lay off nearly 70% of its workers while simultaneously conducting its financial records. The LinkedIn post blew up the internet.
As they tried to process yet another incident of poor corporate governance in a well-funded start-up, people were left stumbling over their thoughts. At least three significant cases of poor corporate governance have occurred in India since 2022 at the start-ups BharatPe, Zilingo, and Trell. It’s interesting to note that Sequoia capital is a common investor in all three firms.
(Source :- Go mechanic insta)
Moneycontrol examined the specifics of what had happened at GoMechanic throughout the previous year and concluded that perhaps investors were unaware that the company had fabricated its financial statements. The first step was the garage chain’s announcement of layoffs, joining a group of modern Indian firms that have let go of more than 18,000 workers.
However, it also discovered that 60 of its 1000 garages were inflating their sales, and those that GoMechanic favoured had been earning too much money. The results of the most recent audit, conducted just before a funding infusion by Softbank and the Malaysian firm Khazanah, reveal how the company’s accounts were inaccurately reporting garages and inflated numbers. Of course, GoMechanic suffered from the epidemic, just like many businesses in the automotive industry (including those in mobility and transport tech).
(Source :- Google)
Considering that individual transportation had been at a halt for many months, the only automobiles in its garages that were being used were those that were vital to providing services, which is why the corporation turned to continue in 2020-2021.
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