One of the most active venture capital firm within Indian startup ecosystem, Sequoia capital is now going through troubled circumstances as result of political game of throne running in full force in India because of upmcoming general election.

American firm Sequoia is finding itself estranged and one of pawns of Indian politics after India has alleged that it has possible role in money laundering activities in the country. Moreover, the Enforcement Directorate (ED), which looks at financial crimes, has already started probing the alleged role of American firm, Sequoia Capital.

In a latest development in this case, ED is looking in to the reason behind the Sequoia’s acquisition of shares of Vasan Healthcare, a health care startup, at a premium from a company allegedly controlled by former Finance Minister P. Chidambaram’s son Karti Chidambaram, said a report by Bloomberg.

In April 2016, India's central government's dictated activities has already created an atmosphere of scare and worries in the international financial community active in India when ED raided Sequoia Capital office in Bangalore. In that spooky incidence, ED grilled the Sequoia executives barring their communications with the outside world as well as temporarily seized Sequoia's office documents, laptops and hard drives, and looked into all, shocking the whole VC and private equity community in the country.

Sequoia, which had invested in Vasan in 2009, has made one of the largest bets on India. In December 2015, it raised $900 million for its India-focused fund. ED had raided the Bengaluru office of WestBridge Capital as well.

Investment funds associated with Sequoia Capital India hold a minority interest in Vasan Healthcare. VT Bharadwaj, a Managing Director of Sequoia Capital India Advisors Private Limited, served as Sequoia Capital India’s designee on the Vasan Healthcare Board of Directors. During his tenure on the Board, he demanded that management of Vasan Healthcare conduct a thorough investigation into the allegations, which was unearthed in 2015.

According to a report by Indian daily, there are two transactions where Sequoia paid Rs. 32.9 crores for shares that just two years before were worth only RS.3 crores. The windfall gain on the shares of Vasan Health Care was made by a company in 2010 - that was indirectly owned by Karti Chidambaram.

Founded by A. M. Arun, who was ranked as 244th richest Indian with ₹2,314 crore fortune in its 2015 list, Vasan Healthcare Group is a health care group based out of Trichy & Chennai.

Via - Bloomberg | Economic Times | LiveMint

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