GoMechanic Founder Admits To Cooked Books, 70% Staff Sacked
Amit Bhasin, the co-founder of the automotive aftermarket service startup GoMechanic, admitted financial reporting errors on Wednesday. As a result, a forensic audit was ordered and a business restructuring that will result in the layoffs of 70% of the company’s 1,000 or so employees was implemented.
It was discovered that GoMechanic manipulated its financial records by exaggerating revenues close to two years after it secured a massive $42 million in funding.
Amit Bhasin claimed in a post on LinkedIn that founders “get carried away” in their pursuit of opportunities to develop.
“Our passion to survive the intrinsic challenges of this sector, and manage capital, took the better of us and we made errors in judgment as we followed growth at all costs, including in regard to financial reporting, which we deeply regret,” he wrote without giving details of the misreporting.
To determine the extent of the financial misreporting, a forensic audit has been requested. In addition to the layoffs, the firm reportedly ordered the surviving staff to labour unpaid for the following three months.
“We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions,” Amit Bhasin wrote.
“This restructuring is going to be painful and we will, unfortunately, need to let go of approx. 70 percent of the workforce. In addition, a third-party firm will be conducting an audit of the business.” Stating that while the situation is far from anything the founders could have ever imagined, GoMechanic is working on a plan which would be most viable under the circumstances. GoMechanic is a business that connects car owners with local auto repair shops. It was started in 2016 by Bhasin, Kushal Karwa, Nitin Rana, and Rishabh Karwa. On its website, it also offers original spare parts and car accessories.
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