The link between Capricorn eServe and former Foodpanda MD Rohit Chadda
A file photo of Rohit Chadda. Documents in Mint’s possession show that Capricorn’s story started in February 2015 when Chadda decided to set up the company as a partnership firm. Photo: Ramesh Pathania/ Mint

A file photo of Rohit Chadda. Documents in Mint’s possession show that Capricorn’s story started in February 2015 when Chadda decided to set up the company as a partnership firm. Photo: Ramesh Pathania/ Mint

Mumbai: A follow-up investigation by Mint into the lapses and frauds at food-tech start-up Foodpanda has revealed that the former managing director Rohit Chadda may have channelled money to a company promoted by his mother and another relative.

The company, Capricorn eServe Pvt. Ltd, was a call centre and all told, Foodpanda, at Chadda’s instance, transferred Rs.2.8 crore to it over a period of six months.

Chadda denied any wrongdoing. “I have no interest in the firm and none of the partners is a member of my family,” he said in an emailed reply.

Foodpanda executives Mint spoke to during an earlier investigation into the start-up said they doubted the antecedents of Capricorn. Back then, Gagan Vashistha, a director on the board of the company, confirmed Capricorn’s association with Foodpanda.

“Yes, we provide 200 people to them and we have been working with them for the last five-six months.” On the allegations, Vashistha had this to say: “Whoever is giving you this information is misleading you. We started as a partnership firm on 15 March and registered on 30 July. Yes, it is true we were one of the highest paid among vendors. But all processes and checks were followed.”

That doesn’t match with the facts that have since come to light and which highlight the www (Wild Wild West) spirit that continues to exist in India’s start-up ecosystem, where entrepreneurs are still coming to grips with building organizations and following rules (some do a better job of this than others).

Documents in Mint’s possession show that Capricorn’s story started in February 2015 when Chadda decided to set up the company as a partnership firm. Foodpanda’s orders had indeed grown and there was a genuine need to bring in a call centre. Chadda sensed an opportunity, but he knew that registering the firm in his name was fraught with risk. So he reached out to a relative, Rajat Mathur. Mathur is employed as associate director (supplier management) at Carlson Wagonlit Travel in Gurgaon. Next, Chadda got his mother Sunita Chadda on board.

Despite repeated attempts, Sunita Chadda did not respond to phone calls. WhenMint reached out to Mathur on 28 October, he said he was busy and could not spare the time to talk. He instead asked that an email be sent to him. Mint sent a detailed questionnaire to Mathur on 28 October. Despite following up several times, Mathur did not respond to the email.

Let’s explain a complex relationship here: Sunita Chadda has two sisters—Savita Sethi and Suman Patney. Patney’s daughter Teena is married to Mathur. Simply put, Mathur is Rohit Chadda’s brother-in-law.

In an emailed reply, Rohit Chadda denied that he had anything to do with Capricorn.

“The company that carried out outsourcing work for Foodpanda was a partnership firm called M/S Capricorn eServe with three partners Gagan Vashistha, Rajat Mathur and Teena Mathur,” he said. “I have no interest in the firm and none of the partners is a member of my family. As per Companies Act of 1956 this was not a related party transaction.”

Documents in Mint’s possession prove otherwise. Anyway, back to the story.

While Mathur was comfortable lending his name, he had little time on hand to set things up. Enter Vashistha, a former colleague. The two had worked together at Interglobe Technologies in 2011-12. Vashistha’s job was to set things up and he was kicked about it. Sometime in March, he joined the team. A partnership deed was drawn—Mathur and Sunita Chadda picked up stake of 42.5% each. Vashistha took 15%.

Now, intent takes you only so far. Early in April, the folks started discussing money. Where’s the money to invest?

Rohit Chadda came up with a brilliant plan. Forget seed capital. How about an advance? From who else but Foodpanda. After all, Chadda was the MD, right?

On 21 April 2015, Pisces Eservices Pvt. Ltd (the official entity which does business under the name Foodpanda) issued a cheque of Rs.40,84,512 in favour of Capricorn. In return, Capricorn issued a few invoices—salary of 100 employees at Rs.28,500 per month. Then, salary of team leaders at Rs.33,500 per team leader. Then, quality analysts at Rs.45,000 per quality analyst. Tax deducted at source and hiring charges. Total bill: Rs.40,84,512.

Needless to say, Capricorn was flush with cash. With three directors. No company to speak of. No office. And no service rendered to Foodpanda. All it had was a name, a partnership deed and the most important thing, a bank account—No: 100405500242 in ICICI Bank Ltd.

Mint has copies of the bank statements.

Business kicked off immediately. Vashistha started hiring and within a few days sent over some 25 new recruits over to Foodpanda for training, because Capricorn still didn’t have an office. By April-end, Capricorn found an office in Gurgaon while it continued to hire.

Everything was going swimmingly. While it is still not clear as to how many people joined Capricorn, Foodpanda kept the money tap open. On 23 May, Foodpanda transferred another Rs.24,94,688 to Capricorn. Meanwhile, Mathur and Sunita Chadda kept withdrawing money. In May , Mathur withdrew Rs.1,72,167. And Sunita Chadda Rs.1,52,167. In June, another big chunk of money came in from Foodpanda: Rs.41,59,335. Sunita Chadda’s needs grew bigger. The same month, she withdrew Rs.2,46,318.

In June, a competitor of Capricorn got wind of the hanky- panky. Etisal International was another back-end service provider for Foodpanda. It was being paid Rs.20,000 per person per month, Rs.8,500 (per person) less compared with Capricorn. Etisal wanted the disparity to be addressed. By then, Rohit Chadda had already resigned and was serving his notice period at Foodpanda. Senior Foodpanda officials Saurabh Kochhar, current chief executive officer of Foodpanda, and Shray Gulati, chief transformation officer, got involved to sort out the mess, but Etisal wasn’t ready to back down. It knew about the Chadda family antecedents of Capricorn and then some more.

Capricorn did not have the online service provider (OSP) licence from the department of telecommunications to carry out business as a call centre. Etisal threatened to go public with the information.

Foodpanda did not reply to the specific question on Etisal. Mint tried reaching out to Etisal, but the company’s landline number wasn’t working. An email sent to Vaibhav Kaushal, assistant general manager at Etisal, on 28 October, did not elicit any response. In his emailed response, Rohit Chadda said that there were several issues with Etisal, which resulted in disruption of Foodpanda’s operations multiple times. “Foodpanda had been facing continuous issues with Etisal as a call centre partner,” he said. “And their team just wasn’t competent enough. In addition, there were multiple occasions when Etisal failed to pay salaries… Since they were not being able to handle quality of the current team strength, there was no question of allocating them more resources so foodpanda had to look for a replacement. Given foodpanda needed to increase our call centre strength urgently due to an imminent TV marketing campaign, foodpanda decided to get a third outsourcing partner and slowly phase out Etisal which is why their management was unhappy.”

What about Capricorn’s OSP licence? “At the time of initiation, foodpanda was informed that the license was applied for. However, as soon as foodpanda found out of the absence of necessary licenses, the contract was terminated,” he added.

Anyway, as often happens in such cases, the issue with Etisal was managed.

But Rohit Chadda had been warned and he swung into damage control mode. “Everything had to be changed,” said a former Foodpanda official who requested not to be identified because he didn’t want to get into any legal trouble with either Foodpanda or Chadda.

“In flat 15 days, and you know how these things work, Capricorn was incorporated as a private limited company. The directors changed. The mother was out. And so was the brother-in-law. Instead they were replaced by Ashna Babbar (Rohit Chadda’s fiancée, whom he has since married) and Teena Mathur (Rajat Mathur’s wife and Rohit Chadda’s cousin). Don’t ask me how this happened but yes it did. Except the signing authority continued to be with the mother and brother-in-law as nominees,” the former Foodpanda official said.

Soon after, Capricorn started life as a private limited company, with new directors (except Vashistha) and a new bank account—No: 100405000487 at ICICI Bank. An amount of Rs.46,53,093 was credited to this account from the earlier account. Foodpanda continued transferring money to Capricorn. In the following two months, August and September, Capricorn received a total of Rs.1.3 crore. Both Rajat Mathur and Sunita Chadda continued withdrawing money from this account too.

Even as all this was happening, Rohit Chadda exited Foodpanda on 30 July. And just about then, Capricorn’s fortunes turned for the worse. Early in September, Foodpanda served a termination notice to the firm. “So it was like, we don’t need your services,” said the former Foodpanda official quoted above. “So there was an option, either we take your site and people or one month notice and end of contract and end of story. Capricorn chose the second option.”

Vashistha started hunting for new business. He reached out to Indiamart, but the company wasn’t interested. Employees were already on their way out and there was little to sustain operations. Starting 30 September, Vashistha stopped coming in to work.

Whatever happened to the money?

Some went in salaries of employees and other office expenditure. But a large chunk of the money, in bits and pieces, was withdrawn by Rajat Mathur and Sunita Chadda. According to the bank documents accessed by Mint, in September alone, the two of them withdrew almost Rs.50 lakh from the company. On 9 October, Mathur deposited Rs.29,93,175 back in the account. The same amount was withdrawn in favour of a company called Capricorn Serve on 16 October.

Mint reached out to Vashistha with a detailed set of questions. He said that he resigned from the company on 9 October. “I worked with Capricorn eServe with honesty and sincerity. But I was never involved with finances so (I have) no clue about it.”

Ralf Wenzel, global CEO of Foodpanda, in response to a query on whether whatever transpired at Capricorn was known to Foodpanda and Rocket Internet, the venture capital firm where Foodpanda was incubated, said in an email: “Foodpanda decided to review the business relationship with Capricorn eServe several months ago. We terminated the contract with the company in September this year as a consequence. Rohit Chadda left Foodpanda India in July this year (2015). Foodpanda is fully committed to ensure compliance in all its business activities and has mandated an independent consulting firm to conduct a compliance-ensuring audit of its Indian operations.” The firm is PriceWaterhouseCoopers.

In addition to his responses, Rohit Chadda said: “Please also note that I was not the whole and sole in charge of operations at Foodpanda and a CEO had been appointed in March 2015.”

The publication of this article was delayed after Rohit Chadda filed a civil suit for defamation and obtained an interim injunction from a civil court against HT Media Ltd, publisher of Mint, and the reporter, restraining the story’s publication. The interim injunction was subsequently vacated by the civil court.


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