State Bank of Pakistan, the central bank of the South Asian nation, ordered fintech tag “Immediately” refund all funds to customers, citing regulatory violations and “other concerns,” which raises existential questions about the startup’s future.
The regulatory ruling follows a months-long investigation into Tag, which offers banking and financial services to users in Pakistan. According to an investor letter obtained by TechCrunch, the startup has been accused of forging documents for a central bank. central bank didn’t describe (PDF) which regulations Tag violated but set a refund deadline of August 19th.
Ahsan Khan, the co-founder of TAG, accused fellow startup co-founder Talal Gondal of forging documents for the central bank, and the bank suspended the startup after discovering the fraud, he wrote in a letter to investors in June.
“I became aware of the unscrupulous and unprofessional behavior of Talal Ahmad Gondal while in charge of TAG from March 31, 2022 (and I had suspicions and concerns about his behavior long before and I resigned from the position of adviser / chief operating officer of TAG Pakistan from 1 April 2022 when I found out about the Talal case),” Khan wrote in a June 16 email that got into the hands of TechCrunch.
“Currently, I am facing illegal actions from the other founders, Talal Ahmad Gondal and Alexander Lukyanchuk, by which they tried to remove me from the position of the founder and shareholder of TAG Fintech on completely fabricated grounds. It appears that this action was taken by both of them acting in concert to shift the blame and responsibility to me alone, which is a rather unfortunate turn of events as I have consistently acted as a sane, prudent and cautious Founder since the founding of LABEL. Therefore, it is imperative that our investors, who have invested valuable amounts in TAG for the purpose of bona fide business and return on their investment, are aware of the alarming state of affairs at this time.”
Tag is one of the fastest growing startups in Pakistan. Last September, it was valued at $100 million in a seed funding round. The startup’s sponsors include Liberty City Ventures, Canaan Partners, Addition, and Mantis.
Gondal did not immediately respond to a request for comment.
further reading: Local journalist Taimur Hassan was report tag issues within a few weeks.
Credit: techcrunch.com /