In an exclusive interview with Deccan Chronicle, Kanthi Dutt, CEO of the recently shut down e-commerce platform SustainKart, addresses the backlash and refutes allegations made by former partner Shilpa Reddy, asserting that the company’s struggles were a result of external challenges, not financial misrepresentation.
Q: What led to the demise of SustainKart, your ambitious sustainability project with Shilpa Reddy?
A: We didn’t fail due to any allegations, but funding winters that lasted eight months played a significant role. When I interacted with investors, big VC firms, HNIs, they started questioning me about the practicality of scaling up sustainability e-commerce. I am still passionate about sustainability, but we realised it wasn’t as scalable as we thought. We were probably a decade ahead, and we didn’t have the capacity to withstand that. Also, investors teach you ‘pump and dump’, which we didn’t want to follow. We raised around six crores across two rounds, but it wasn’t enough to sustain the business.
Q: How much did Shilpa Reddy invest in SustainKart, and why did you shut it down?
A: Shilpa Reddy claimed to have invested two crores in a recent media interview, but she did not make any investment in SustainKart. Neither of us invested any money other than our sweat into the company. We shut down SustainKart because if we moved forward, the journey would continue to be ‘pump and dump.’ We had to keep raising capital, and it was very directionless. Many people told us it would take two to three decades to see growth in the sustainability ecosystem. We didn’t have the right investors or the run rate to back us. I also repent partnering with India Accelerator, which claimed to accelerate our startup but turned out to be a bogus firm. They didn’t bring quality dollars or meaningful support.
Q: How do you respond to the backlash from employees and vendors claiming they haven't been paid?
A:I would deny many of the comments coming from what I call ‘troll cells.’ As someone from an e-commerce background, I have seen that people with bad experiences are more likely to speak out. For instance, if 100 people shop a product, only the 1-2 people with bad experiences will leave negative reviews. Similarly, out of our team of 130 people, probably not more than five have a problem with me as the CEO or the company overall. I have employed and taken care of these people for over two years, and they have learned a lot alongside me. I have made peace with the fact that a few people may not have good things to say about me. However, I don’t think many of the claims circulating in the media are factual. In fact, some articles have even claimed that I failed my Class 10, which is not true – I secured 90% in my 10th and 94% in my 12th standard. I chose to quit education to venture into entrepreneurship early, believing that experiences can teach us just as much as books.
Q: Did you clear the salaries of all your staff members before shutting down Sustainkart?
A: To be honest, a few staff members might not have received their full salaries, only part salaries for their last month of employment. However, the rest of them received their full and final settlements. For those few employees, we did what we could to our best ability, considering the company was bankrupt and we had a handful of liabilities.
Q: What do you have to say about the allegations of misrepresenting financial figures to attract investors?
A: “I deny these allegations. It’s false, absolutely false. If an investor goes to the press before verifying facts or seeking judicial intervention, it speaks volumes about their intentions. There were news articles claiming I was dragged to court and that CBI, ED complaints were filed against me. But I can say on the record that none of this is true. We haven’t received any intimation or notification of complaints. It’s been three months since these articles surfaced, and there’s no trace of legal action. This mediator, the accelerator, might be trying to protect themselves from their angel investors. But I have countered this, pointing out that this accelerator has no success stories despite being six to seven years old. Why target SustainKart? There’s no ED complaint, no CBI complaint, no legal action whatsoever. This is just an attempt to make me a scapegoat, which is unfair. When there’s no evidence, I believe these media articles are just meant to pull us down.
Q: Have the investors taken any legal action against SustainKart, and what's your response to their claims?
A: “No, the investors haven’t sued the company or taken any legal action. Their claims have no validity. There was no financial misrepresentation or mishap. If there was an issue, they received funding almost one and a half years ago. What were they doing until the last two months? As investors, they should have been tracking the company’s progress regularly. We informed them that the company wasn’t doing well and was shutting down operations. Yet, they went to the media before approaching any authorities. It’s unclear why they would do that, but it raises questions about their intentions.
Q: Shilpa Reddy claims that she had nothing to do with SustainKart’s operations and only got celebrities on board to help the company
A: Her claims are completely false. She resigned as CFO in August 2023, but she’s contradicting herself because she said she resigned from all duties. However, she was drawing a salary, interacting with staff, investors, and vendors daily. If she wasn’t part of operations, why was she drawing a salary? I have her employment agreement and resignation letter, which I have shared publicly.
As CFO, her duties included financial planning, debt service ratio, and managing assets and liabilities. She can’t throw those responsibilities on me. Moreover, she still holds approximately 32% of the company’s equity and remains a designated partner of SustainKart Marketplace LLP.
Regarding her claim that people suggested getting celebrities on board, every D2C brand works with celebrities. We were no different. E-commerce firms work with hundreds of celebrities to achieve massive marketing plans and revenue figures.
Q: Shilpa also said that she didn’t have cheque signing power and was not involved in the company’s financials?
A: That’s completely false. She did have cheque signing power, and there are thousands of transactions that passed through the bank with her Snorkel OTPs. I have shared the board resolution copy, which clearly states she has unlimited powers for banking. In fact, she’s the first chair and I am the second chair at the bank. I have also shared proof of a cheque she signed and passed through HDFC Bank for one of our salaries. She’s still a partner with the company and was involved in the financials, contrary to her claims. She even signed the audited financials of the company and many cheques. The bank teller would call her first as the first chair when a cheque needed to be passed. It’s clear she’s not being truthful.
What next, Kanthi?
My parting thoughts are that the recent attempts to tarnish my reputation were a deliberate effort to bring me down. However, I firmly believe that facts will ultimately prevail. It may take time, but the truth will come out.
I have taken the necessary legal action against those who have fabricated allegations against me. This experience has taught me a valuable lesson: know who you are partnering with. The importance of vetting and trusting the right people cannot be overstated. It’s unfortunate that some investors chose to go to the media before seeking legal recourse, which raises questions about their intentions. Nevertheless, I remain committed to clearing my name and ensuring that justice is served.
