Snapdeal, which is reportedly close to being acquired and merged into rival Flipkart, has filed an FIR against Quickdel Logistics Pvt Ltd., which runs the e-commerce logistics company GoJavas, reports The Economic Times. The FIR, filed by Snapdeal parent Jasper Infotech, names Quickdel Logistics promoters Praveen Sinha, Randhir Singh and Ashish Chaudhary, along with former executive director of the company Abhijeet Singh. The complaints against them include cheating, forgery, conspiracy, criminal breach of trust and criminal misappropriation of funds. It’s worth noting that all four of them are no longer with the company. The FIR was filed with the Economic Offences Wing of Delhi Police.

Apparently, an internal investigation conducted by Snapdeal, of Quickdel’s accounts between January 1, 2015 and March 31, 2015, revealed that inflated and excess payments had been made to non-existent persons. Based on this Snapdeal first registered a complaint with Delhi Police, which was investigated and now an FIR has been filed.

The alleged misappropriation of funds is to the tune of Rs 357.26 crore: Snapdeal alleges that they were “induced into buying shares of Quickdel”, following which they paid Rs 119.99 crore to Randhir Singh and Rs 237.27 crore to Praveen Sinha to acquire a 49.99% stake in the company.

It’s worth noting that last year, an audit conducted by Rocket Internet revealed certain corporate governance violations and financial impropriety of former executives at fashion e-tailer Jabong, including Praveen Sinha, who was the former managing director of Jabong. One of the primary focuses of the audit was the alleged fraudulent transfer of GoJavas (then the logistics unit of Jabong) into an entity that was controlled by Sinha. Interestingly, soon after this revelation, Flipkart acquired Jabong for $70 million in cash.

Subscription-based online media publication, The Ken had reported on the alleged conflict of interest in the sale of GoJavas to Quickdel Logistics, and then to Snapdeal, based on the leaked audit report, but were later forced to take down the article after Sinha filed a case against them and an ex-parte interim injunction was passed by a court in Hajipur, Bihar. The Ken had told MediaNama that they “were not made aware of this case nor of its court proceedings. We also do not have the full documents related to it. Thus and since the matter is sub-judice, we’re still finalizing our legal strategy. Nonetheless we completely stand by the factual accuracy of our article.”

While, earlier this year a number of cases were filed against GoJavas for defaulting on payments to cargo vendors. At the time, the company had denied all charges.

It remains to be seen how this latest development impacts Flipkart’s reported acquisition of Snapdeal. The longer the due diligence procedure drags on, the more chances that further murkier details will be unearthed and affect the eventual value of the deal, if any.

The GoJavas saga

In August 2016, courier service provider Pigeon Express had acquired 51% stake in GoJavas, and Pigeon Express’ director Anand Rai joined GoJavas as managing director. Just a few months earlier, it was reported that Pigeon Express was in talks with Snapdeal to acquire their stake in GoJavas. At the same time, it was reported that the company had suspended operations and was considering an organizational overhaul which would involve layoffs.

Snapdeal, in a bid to strengthen its supply chain infrastructure, has picked up a minority stake in GoJavas, in March 2015. At the time, Snapdeal hadn’t revealed the size of the investment. A few months later, in October 2015, Snapdeal invested a further $20 million in GoJavas, and said that the company had been one of its ‘best performing’ last mile logistics partners, reducing Snapdeal’s delivery time by 24 hours in the last 6 months.

GoJavas began as Jabong’s third-party logistics service called JaVAS (Jabong Value Added Services), in December 2012. However, it was later sold to QuickDel Logistics in February 2014, and rebranded to GoJavas.

Snapdeal’s Vulcan Express: In February this year, Snapdeal confirmed that it would be laying off employees at the company’s logistics unit Vulcan Express, and in its payments division FreeCharge, but didn’t comment on the number of people being laid off. The company added that employees would be given a three-month severance package, and that its offices in Gurgaon (where Vulcan operates from) and Bangalore (FreeCharge) will be affected due to the layoffs.

*Corrigendum: We had mistakenly reported that the article about the alleged conflict of interest in the sale of GoJavas on The Ken has been reinstated, when in fact it is a follow up story. We regret the mistake.