Zepto, a quick commerce platform gearing up for its IPO, revealed in its updated draft red herring prospectus that founders Aadit Palicha and Kaivalya Vohra were summoned by the Enforcement Directorate (ED) in April under the Foreign Exchange Management Act (FEMA) of 1999. The ED requested information and documents related to foreign investments, shareholding patterns, financial statements, loans, tax returns, and the company’s business model.
The summons, dated April 8, required both promoters to provide details about the company’s operations and their personal holdings. Kaivalya Vohra appeared before the ED on April 17 and April 22, while Aadit Palicha attended on April 20 and May 15. The founders complied with the ED’s requests, submitting the necessary information and additional details during subsequent interactions.
Zepto stated in its filing that no further communication had been received from the ED after their response. However, the company cautioned that future inquiries, investigations, or penalties could not be ruled out. This disclosure has been included in the risk factors and promoter-related litigation sections of the updated prospectus.
The Securities and Exchange Board of India (SEBI) approved Zepto’s IPO in May, which is expected to include a fresh equity share issue of around Rs 8,000 crore and an offer for sale by existing shareholders. The company plans to use the proceeds to expand its dark store network, enhance technology infrastructure, and support marketing activities through its subsidiary, Zepto Marketplace Private Limited.
