Sandeep Aggarwal’s story of entrepreneurship is one with many twists and turns. He hit the first bend on what was till then a relatively linear road on a warm and sunny July day in 2013, in San Jose, California, when the Federal Bureau of Investigation (FBI) arrested the cofounder of ShopClues, a two-year-young online marketplace headquartered in Gurgaon

Sandeep, who was 40 then, was visiting his home in San Jose, with wife Radhika and their two children. ShopClues was on to a good thing, having raised $10 million four months back in a round led by Helion Ventures, Nexus Partners and Netprice. com, a Japanese business group based in Tokyo.

The family had just visited Disneyland and friends in San Jose said that Sandeep had never looked so relaxed since he quit a job as an internet analyst at investment bank Caris & Company, in San Francisco in 2011, and moved back to India to start ShopClues. That’s when the US federal police came calling.

The crusade against insider trading by Preet Bharara, the US attorney for southern district of New York, is by now well known in India — especially for convicting former McKinsey chief Rajat Gupta.

Bharara created a record of sorts by getting 85 consecutive insider-trading convictions. One of his prosecution targets was the Steven Cohen-led hedge fund SAC. Sandeep had been an internet business analyst before 2011 and was indicted as a tipper for passing on information to a SAC executive on a possible Microsoft and Yahoo deal in 2009 (Sandeep worked for Collins Stewart Wealth Management at the time) . Could Sandeep survive this setback and also keep ShopClues afloat?

Radhika and Sandeep had met in college in Indore — she was his junior by a year and the two had dated for two years before marrying in 1997. She was fully involved in the business and had been the first in the group to move to India to find an office and homes for the founding team. The two others were Mrinal Chatterjee, who handled technology, and Devesh Rai, who handled the merchants.

Proxy Settings Even so, dealing with the situation in 2013 after the FBI investigation began was not easy. “It was extremely awkward,” says Radhika as she recalls those days. Questions were being asked not just by investors but employees and partners as well. Radhika says the management decided to be open about the situation. “We actually had zero attrition at the time, no one left because of that situation.” She points out that the company has retained that openness with its numbers; various charts and graphs with the latest numbers are, in fact, posted on the glass walls of its Gurgaon office for all employees to see.

While there was no exodus of employees, Sandeep had to quit as CEO by October 2013 and become a consultant for the company. The investors were convinced to let Sanjay Sethi take over as the CEO along with an enhanced role for Radhika as chief business officer. Sandeep promised to handhold them for as long as needed, something he said he would not be able to do as well with a CEO from outside.

In November, Sandeep pleaded guilty and entered a plea bargain with the US prosecutors. At the same time he quit his consulting position at ShopClues.

Luckily for ShopClues, Sandeep had created a playbook well in advance — what the company would do till 2020 had been mapped out at the outset. “For the next few months I infused my soul and heart and brain into Sanjay and Radhika,” says Sandeep. “They were my cofounders, but ShopClues was my baby.”

 

Source:

http://articles.economictimes.indiatimes.com/2016-03-06/news/71246531_1_shopclues-sandeep-aggarwal-radhika

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