Sandeep Kapoor and Algo Legal withdraw defamation suit against Sequoia Capital and media outlets

Algo Legal and its founder Sandeep Kapoor have withdrawn their ₹1 crore defamation suit filed before a Bengaluru court against Sequoia Capital as well as several media outlets..Explaining why he decided to withdraw the case, Kapoor said to Bar & Bench,"We have decided to withdraw the defamation suit filed by us against the wholly unsubstantiated allegations made against Algo Legal and Sandeep Kapoor by various media houses. The fact that these allegations have not been proved, or resulted in any action – well over 6 months after they surfaced – clearly shows the falsity of these accusations and the malicious intent with which they were made. However, instead of being dragged through endless legal proceedings and defending against allegations which continue to remain baseless, unsubstantiated and hollow, we have decided to move forward and do what we do best – which is to service our clients to the best of our ability.".Proceedings were underway before City Civil and Sessions Judge MH Annayyaanavar, who had refused to grant any interim stay on publication of articles relating to Algo Legal..Algo Legal is a law firm founded by Sequoia Capital's former General Counsel Sandeep Kapoor, who as per his LinkedIn profile, worked at Sequoia for almost nine years till 2019.As per an email, Sequoia informed companies that “concerning incidents” involving the law firm Algo Legal were found in a recent investigation.Kapoor allegedly threatened some of the Sequoia portfolio companies with cases for violations of the Foreign Exchange Management Act (FEMA) and investigations by the Income Tax Department, the Enforcement Directorate (ED) and other government agencies.It was further alleged that Kapoor, while taking advantage of his earlier position as Director Legal of Sequoia, was arm-twisting these portfolio companies to make them hire his firm (Algo Legal) or related entities for all legal work.Several media outlets then reported that Sequoia had cut ties with Algo Legal..[Exclusive] Threats of ED raids, arm-twisting and more: Why Sequoia Capital cut ties with Sandeep Kapoor's Algo Legal.Kapoor and Algo subsequently filed a defamation suit against Sequoia and the media outlets, contending that the publication of false news items resulted in the exit of three partners and several lawyers of the firm.The suit stated that Sequoia had terminated the services of Kapoor on January 31, 2022. On April 28, Algo Legal wrote to Sequoia for a meeting to clear any misunderstandings between them. Before this meeting could take place, the plaint stated, defamatory articles were published by the defendants which tarnished the reputation of Algo Legal and Kapoor.Claiming that the news articles were maliciously motivated, laced with canards and entailed deliberate misrepresentation of facts, Kapoor stated in the plaint that he has been ridiculed and jeered in social circles as a result, and that the good opinion that people have of him has been diminished.Owing to the fiasco, Algo Legal's standing in the market has also been directly impacted, the plaintiffs had stated.