Not-so Frank Students Account

JPMorgan Chase has taken down the website for a student-aid platform it acquired two years ago for $175 million after accusing the founder of widespread fraud. The financial giant claims it was sold a “lie” by fintech startup Frank, and is suing 30-year-old founder Charlie Javice and other former executives for reportedly lying about how successful the company was, namely by creating a massive database of fake users to fool the bank when it asked for proof.

5 Million Students Over 6,000 Colleges - JPMorgan made that whopping nine-figure investment in Frank - described by Javice as “Amazon for higher education”—in 2021 after the startup had already attracted support from billionaire Marc Rowan and a range of others, including VC Aleph, edtech investor Reach Capital, and homeowrk-helper app maker Chegg. At the time, Javice boasted about the JPMorgan deal on LinkedIn, writing that Frank was already “serving over 5 million students at over 6,000 colleges.”

JPMorgan claimed Javice lied “about Frank’s success, Frank’s size, and the depth of Frank’s market penetration.” Javice “represented in documents placed in the acquisition data room, in pitch materials, and through verbal presentations [that] more than 4.25 million students had created Frank accounts to begin applying for federal student aid using Frank’s application tool.”

JPMorgan claims in its suit that it learned the truth about Frank only after sending emails to about 400,000 customers, the overwhelming majority of which bounced back. Instead of getting a business with 4 million clients, JPMorgan learned months later that it had gotten stuck with one with “fewer than 300,000 customers,” the bank’s lawsuit contends.

Fake Accounts - Javice is accused of hiring a data scientist to invent fake accounts, giving the impression during JPMorgan’s due diligence process that Frank’s customer base contained more people than the city of Los Angeles—when in reality, it was smaller than Lexington, Kentucky. Javice’s roster allegedly contained “a list of names, addresses, dates of birth, and other personal information for 4.265 million “students” who did not actually exist.” The bank claims Javice initially fought its request to provide customer metrics, arguing that sharing such a list raised “privacy concerns.” After the bank’s team insisted, Javice “chose to invent several million Frank customer accounts out of whole cloth.”

The suit includes screenshots of Javice’s presentations where she depicted Frank’s growth, showing more than 4 million customers.

Managing Toxic Bosses

Managers account for around 30% of the variability in employees engagement and performance. In other words, the degree to which you love or hate your job, and are good or bad at it, is largely dependent on the boss you have. This is why picking the right boss is probably as important as picking the right job, career, or romantic partner. Some of the attributes that make bosses good or bad are purely dependent on their personality, which explains up to 50%. 

Here are five recommendations to manage your bosses.

Learn To Predict Them - Most of the managers described as “bad bosses” display a consistent pattern of behaviors—including their bad or undesirable habits—that you can prepare for and preempt. Disliking bad news, overreacting to certain comments or triggers, or the inability to deal with negative feedback are examples of what irritating bosses do, just like strong rain, winds, and low temperatures are examples of a bad climate region. Learn to decode your boss, and most of the problems they cause you will go away, even if the reason is that you have managed to lower your expectations.

Adjust Your Behavior - No matter how smart and interesting you think you are, don’t assume that others agree with you. No matter how great your boss thinks you are, there’s a strong chance that they still think they are better than you. And even if they don’t, they may feel they need to pretend they do. 

Of the many ways you may consider relating to your boss, there is no more important way than to accommodate your behavior to their preference. This includes trivial things, like going with their preferences and suggestions, even if they ask you for yours. And substantial things like ensuring you don’t do anything that significantly annoys them, or say things they clearly dislike. Adjusting your behavior to your boss is a social skills and it is natural act that follows from learning to predict them.

Make Yourself Useful To Them - Most managers will appreciate people who make them look good, especially with their own managers. Think about what your boss is trying to achieve, and focus your efforts on helping them achieve it. Sadly, most people are too focused on themselves and their own careers to focus on advancing their manager’s, which, ironically, is the best way to advance their own career.

Practice Self-coaching -  The most successful people understand that they are a work in progress. This means learning new behaviors and unlearning bad ones. It means learning to go against your nature, controlling, or mitigating the negative tendencies that may impair your reputation. Improving your self-awareness, so you can understand how people see you and what they think of you, is key to improving your professional self and upgrading your reputation.

The same people who complain about their boss are often unaware of how they are seen by others, including their boss, which stops them from getting better. If you spend less time complaining about your manager, and more time understanding why people may complain about you, you will become more rewarding to deal with, which will even help you get along with your boss. 

Avoid Working For Toxic Boss - Sometimes there’s just no fix to improving your relationship with your boss, because your boss truly is the problem. The only fix is to get away as fast as you can from toxic personality traits with destructive and parasitic leadership. Instead of developing immunity to such parasitic individuals, it is healthier to move to less contaminated or toxic environments. 

Any relationship requires both parties to make an effort to improve things, but even if one of the two attempts this, both sides will benefit. 

Zilingo - From Hero To Zero

Zilingo, one of Singapore's startups, has suspended chief executive officer Ankiti Bose after an effort to raise new funding led to questions about the company's accounting. The company, which supplies technology to apparel merchants and factories, had been trying to raise US$150 million to US$200 million when investors began to question its finances as part of the due diligence process.

The investment - which could have boosted Zilingo's valuation to more than US$1 billion. The startup's investors, which include Temasek Holdings and Sequoia Capital India, have started an investigation into the financial practices.

Zilingo's auditor raised questions about its accounting. The concerns centre on the way that Zilingo, which regulators said had not filed annual financial statements since 2019, accounted for transactions and revenue across a platform spanning thousands of small merchants.

Bose Claimed No Wrong - Bose has disputed allegations of wrongdoing and contends her suspension was due in part to her complaints about harassment. She has hired an attorney to represent her and has called the investigation a "witch hunt".

The exposure represents a dramatic turn of fate for one of Singapore's most celebrated startups. Zilingo was founded by Bose and chief technology and product officer Dhruv Kapoor in Singapore seven years ago to help small businesses across South and Southeast Asia sell their goods online.

What Zilingo Offers - The company began by working with small merchants that sell to consumers, and then expanded into adjacent areas. As the founders started talking with small sellers, they realised many lacked access to robust technology and essential capital.

That led them to develop software and other tools that would allow merchants to access factories in places like Vietnam or Bangalore, and would smooth the complicated process of shipping across borders. In 2018, Zilingo began to team up with financial technology firms to provide working capital to small sellers so they can buy raw materials to produce goods.

In early 2019, Zilingo raised US$226 million from investors including Sequoia and Temasek, and pushed its valuation to US$970 million, almost the US$1 billion mark that earns startups designation as a unicorn. Bose, then 27, was celebrated as a visionary and a sign of the entrepreneurial potential for Southeast Asia. Bose had worked at Sequoia earlier and had said the experience helped her build the startup.

Blame It On Covid - Zilingo, which had grown into a full-blown marketplace for wholesale buyers and sellers in the fashion industry, faced growth troubles after pandemic-fuelled restrictions forced many small businesses to shut their doors.

To rein in its own costs, Zilingo said it cut a number of jobs in 2020 and downsized marketing, sourcing and support teams in the US, Australia, Singapore and Indonesia. The company made an aggressive pitch in its latest effort to raise fresh capital.

Late last year, it forecast that core net revenue would rise from about US$40 million in fiscal 2021 to roughly US$60 million in fiscal 2022 and US$100 million the year after. Zilingo said it anticipated breaking even on core Ebitda - or earnings before interest, taxes, depreciation and amortisation - in fiscal 2023 and then reach almost US$200 million in fiscal 2026.

On March 31, Bose was called to a meeting with three board members and told about "serious" complaints about discrepancies in accounts and mismanagement. She was later questioned by two people from Kroll, the investigations firm. Her suspension is scheduled to run until May 5.

Ruyi Technology Losses Shine

Ruyi Technology Group, a luxury fashion conglomerate with plans on becoming China's LVMH, has defaulted on more debt bringing the total amount to about CNY9 billion (USD1.3 billion). Ruyi failed to follow court orders and repay debt worth more than CNY1.1 billion, according to recent entries on corporate information platform Tianyancha.

Chairman Qiu Yafu, who took control of Ruyi in 2009, declared his intention to turn the Jining-based firm into China's LVMH in 2018. But the company’s breakneck acquisition of overseas fashion brands and a pandemic has upended that.

Ruyi was hit by the bankruptcy of firms it owns, credit rating downgrades, and overdue payment of huge debts in 2020, and, unable to raise the funds, also failed to complete its acquisition of Swiss luxury fashion house Bally that year.

The company, which owns Shenzhen-listed Shandong Ruyi Woolen Garment Group, has invested in 46 firms, while its unit Ruyi Fashion has invested in 44 others, according to data from Tianyancha.

Ruyi bought French apparel and accessories company SMCP for EUR1.3 billion (USD1.3 billion) in 2016. The following year, SMCP went public in Paris, posting almost 100 percent revenue growth about three years after its acquisition.

But Ruyi lost its position as SMCP's biggest shareholder in 2021 following default on a EUR250 million (USD257.3 million) debt. Earlier this year, SMCP's shareholders voted to dissolve the board, leading to Qiu losing control of the French firm.

Ruyi also acquired British luxury brand Aquascutum, Israel men's wear group Bagir, and other fashion brands. In January 2019, it acquired US-based synthetic fibers and polymers giant Invista for USD2.6 billion. This February, Ruyi's creditors began to seek control of Invista due to a default on a USD400 million loan.

Qiu has gradually lost control of various companies following a string of defaults. As the actual controller of these companies, he is now classified as having failed to fulfill court orders and is restricted from high-level consumption.