The State Bank of Pakistan, the country’s central bank, has ordered fintech Tag to refund all funds “immediately” to clients citing regulatory violations and “other concerns”, raising existential questions about the startup’s future.
The regulatory action follows a months-long investigation into Tag, which provides banking and financial services to users in Pakistan. The startup has been accused of falsifying documents to the central bank, according to an investor letter obtained by TechCrunch. central bank did the outline (PDF) that violated regulations violated the label, but has set an August 19 deadline for a refund.
Ehsan Khan, co-founder of Taj, accused the start-up’s other co-founder, Talal Jundal, of falsifying documents for the central bank. Upon discovering the fraudulent act, the bank suspended the startup, he wrote in a letter to investors in June.
“I have learned of Talal Ahmad Gundal’s unscrupulous and unprofessional behavior while operating TAG since March 31, 2022 (and had doubts and concerns about his behavior long before that, and had resigned from the position of Adviser/Operational Director of TAG Pakistan as of April 1, 2022 when I became aware of the case Talal.), Khan wrote in the letter dated June 16, obtained by TechCrunch.
“Currently, I am facing illegal actions by the other founders, Talal Ahmet Gundal and Alexander Lukianchuk, through which they tried to disqualify me as founder and shareholder of TAG Fintech on completely fabricated grounds. This action appears to have been taken by both of them acting in concert from their In order to assign blame and responsibility to me alone, which is a very unfortunate turn of events because I have been consistently acting as a sane, wise and cautious founder since the inception of Logo Card.Therefore it is imperative that our investors, who have invested valuable amounts in TAG for the purpose of creating a good project and return on their investment, are aware of the exciting situation to worry at the moment.”
Tag is one of the fastest growing startups in Pakistan. It was valued at $100 million in an initial funding round in September last year. The startup counts Liberty City Ventures, Canaan Partners, Addition and Mantis among its backers.
Gondal did not immediately respond to a request for comment.
in-depth reading: Local journalist Timur Hasan Kan Report Tag issues for weeks.