After PIL, Meesho and its directors face FIR for selling fake products

Police officials in the state of Uttar Pradesh have registered a first information report against Meesho on a complaint filed by a customer who said that he was sold a fake Rolex watch and GUCCI t-shirt on the social commerce platform.

The FIR has been registered at Wazirganj police station in Lucknow and comes within a week of a public interest litigation (PIL) that was filed in the Delhi High Court against Meesho and two other social commerce platforms - GlowRoad and Shop101 - for not displaying names of manufacturers, country of origin and the MRP of products sold on their platforms.

Entrackr has seen a copy of the FIR and has also confirmed its registration independently. 

According to the FIR filed on January 24, the complainant, a resident of Lucknow, had bought a Rolex watch and a GUCCI T-Shirt on January 7, 2021 from Meesho’s marketplace platform. 

The two products were received by the customer on January 21, 2021 and upon seeing the poor quality of the products, the complainant became suspicious about their genuineness. The complainant took the products to multiple shops in the city and from the feedback it became clear to him that fake products had been shipped to him under the garb of genuine products. 

The FIR has been registered against the company and its directors - Vidit Aatrey and Sanjeev Kumar - under Section 406 of the IPC for criminal breach of trust.

Responding to our queries, Meesho’s chief financial officer Jatin Mazalcar said that they are yet to be notified about the registration of the FIR.

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The alleged unfair trade practices of social commerce companies are increasingly coming under the scanner.  

The PIL filed in the Delhi High Court, which is yet to be heard, contends that the absence of mandatory information helps the sale of counterfeit and spurious goods on such platforms. It’s worth noting that Entrackr had reached out to Aatrey in December with a detailed questionnaire over Meesho bypassing FDI regulations.

In his response at that time, Aatrey had maintained that Meesho’s users get details of the sellers from its contact centre. “With respect to the “country of origin” disclosure, we have made the disclosure mandatory for all new product listings and proactively working with all our suppliers to get these details and can assure you that most of the catalogues have the “country of origin” disclosure in the product description,” he said.

Backed by the likes of Facebook, Sequoia and Prosus, Meesho has emerged as the category leader in the social commerce space. The company had closed its $125 million Series D round in August 2019 and it is in talks with new and existing backers to raise $150 million in a new round at an estimated valuation of $1.5 billion.

During FY20, Meesho achieved a 3.8X surge in operating revenue which stood at around Rs 307 crore as compared to the Rs 80 crore in FY19. Its annual losses also shot up 3.1X to Rs 315.4 crore in the year ending March 2020 from Rs 100.42 crore in FY19.