State Bank of Pakistan, South Asia’s national central bank, has ordered fintech tag to return all funds to customers “immediately” for breaching regulatory requirements and “other concerns”.
The regulatory move follows a months-long investigation into Tag, which provides banking and financial services to users in Pakistan. According to an investor letter obtained by TechCrush, the startup has been accused of breaching documents for the central bank. The central bank did not specify which accounts breached regulatory rules, but set an August 19 deadline to return the money.
Ahsan Khan, the co-founder of TAG, accused the startup’s other co-founder, Talal Gondal, of forging documents for the central bank. When the fraud was discovered, the bank suspended the startup, he wrote in a letter to investors in June.
I was aware of Talal Ahmed Gondal’s foolish and unprofessional conduct while running Tagal since March 31, 2022 (and before that I had suspicions and concerns about his behavior and resigned as Advisor/COO of Tagal Pakistan from April 1, 2022 when I learned about Talal’s case.
“I am currently facing illegal action by the other founders, Talal Ahmed Gondal and Alexander Lukinchuk, who are trying to oust me as the founder and shareholder of TAG Fintech on completely fabricated pretexts. This step seems to have been taken by both of them working together to avoid blame and responsibility solely on me. This is a very sad event as I have been a sane, sane and careful founder since the start of awareness. TAG Therefore, there is a need to make investors aware of the current state of concern by investing high-value investors in TAG and returning their investment.
Tag is one of the fastest growing startups in Pakistan. It was valued at $100 million in a seed funding round in September last year. The startup counts Liberty City Ventures, Canaan Partners, Adder and Mantis among its backers.
Gondal did not immediately respond to a request for comment.
Further readingLocal journalist Taimur Hasan has been reporting on the tag problem for weeks.