Nykaa, a prominent beauty and fashion product retailer in India, has taken legal action against its former Chief Business Officer (CBO), Gopal Asthana.
Gopal, who now heads Tata Cliq’s fashion business, is accused of breaching confidentiality, misappropriating proprietary data, and attempting to harm Nykaa’s business.
The lawsuit sheds light on the competitive dynamics within the e-commerce industry and underscores the importance of safeguarding sensitive information.
Background: Gopal Asthana’s Transition and the Allegations by Nykaa
Gopal Asthana served as Nykaa’s CBO for four years and was also a member of the company’s board.
His high-ranking position granted him access to confidential business data, including strategic plans, customer insights, and proprietary algorithms.
Allegation of Poaching: Nykaa alleges that Gopal approached several employees who had previously reported to him. These employees were encouraged to join Tata Cliq, a direct competitor in the e-commerce space.
Some of them have indeed made the switch over the past year.
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Financial Recovery: Nykaa claims that it paid Gopal significant remuneration during his tenure, including long-term incentives and stock options.
The company seeks a refund of approximately ₹19 crore related to employee stock option benefits he availed of, along with an additional ₹5 crore citing loss of goodwill.
The high court has issued an interim order directing Gopal Asthana to refrain from hiring executives for Tata Cliq from Nykaa. This order aims to prevent further potential damage to Nykaa’s business and protect its interests during the legal proceedings.
Gopal Asthana’s Response
Gopal has refuted the allegations, stating that they are incorrect. He believes that the truth will be established during arbitration. As the matter is sub-judice, he refrains from further comment.
On the allegations, Gopal Asthana told Economic Times that they are “incorrect and they will get established in the arbitration. However, since the matter is sub-judice, I can’t comment on the same.”
He added, “The matter is between my former employer and me, and my current employer is not a party in the matter and therefore best left out in the discussion.”
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