Stayzilla, the home-stay startup which shut down its operations last month with hopes of a relaunch with a pivoted business, is now in even deeper trouble. Company’s CEO Yogendra Vasupal, has been arrested by the Chennai police on accusations of fraud, allegations which are baseless at best and continue to highlight the kind of corrupt environment India continues to live in.

Yesterday, Sanchit Singhi, co-founder of Stayzilla, sent an email to the company’s investors asking them to help Vasupal who went ‘missing’ or out of contact. He had last confirmed his location at the Commissioner of Police Department. But, Vasupal later sent a message to Singhi saying “they have snatched his phone”. The Tech Portal has a copy of the email.

Advertising firm Jigsaw, had slapped charges of defrauding against the company over pending dues of Rs 1.7 crore, which has led to the arrest of Yogendra Vasupal.  The email also has mention of several threats and harassment claims from the advertising firm and a complaint that the firm had registered in Mylapore Police Station.

Shedding light on the alleged harassment from the advertising agency, Sanchit Singhi stated in the email:

The calls started in December, when Jigsaw Advertising sought the influence of a local MLA. The MLA’s aides started calling and harassing (Yogi) Vasupal and our staff. Some of the calls have been of a threatening nature, abusing Yogi and his family members. Two days ago, his parents received a parcel at home to find a black magic sculpture with a photo of Yogi attached with a nail to its forehead.

As per a report, a team led by assistant commissioner of police S Muthuvel Pandi and inspector Anand Babu of the entrustment fraud wing of the Central City Crime branch had questioned Yogendra Vasupal. He confessed to having defrauded advertising agency Jigsaw of Rs 1.72 crore, as per Times of India. However, we couldn’t confirm this independently and have come across various reports which suggest otherwise. He will be produced in front district magistrate today.

Yogendra was taken to the magistrate at 10.00 PM even though courts do not function after 6 PM. His whereabouts from when the cops took him into custody were not known and the lawyer and the family had to go from one station to another looking for him.

However, various startup CEOs and investors from firms such as Matrix Partners, MobiKwik, and Freshdesk among others have come forward to express support for Yogendra Vasupal on social media. He pointed the deficiencies in the system when a company is trying to wind up operations in India.

Notably, Stayzilla decided to halt its operations last month. Till now, the company had raised funding to the north of $34 million from significant investors such as Nexus Venture Partners and Matrix Partners participated in multiple rounds. The company concentrated on getting back to the initial, and stable, value system, all along the past year. However, as it turns out, 12 months was just not enough time to shift paths.

What Company CEO Yogendra Vasupal has to say

In a medium blog post — which Vasupal says was pre-drafted –, he said

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.

Commenting about the issues faced with the landlord, he said that “he assaulted my admin staff in front of me threatening to kill him with the revolver in his car.” Notably, their landlord is also a politician.

In the same post, he mentioned that he went to the Police Station the same night with a complaint and evidence to register the case. However, he returned with only a promise that the complaint will be heard by a senior officer who can decide the next steps. After spending hours the next day in the police station, a FIR was lodged after various officers got to know that he had video evidence of the assault and that the matter started attracting media attention.

He has also written a blog post, detailing his experience dealing with the authorities and threats from the landlord as well as from the advertising agency. You can check the Medium blog post here.

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