Capiter Founders Calls Sacked "Fake Propaganda" as the E-Commerce Website Remains Shut
Capiter, an Egyptian e-commerce startup specializing in retail and FMCG, has dominated discussion since the board recently fired its founders for “inability to fulfill their fiduciary duties over the past week and not reporting to representatives of the Board and shareholders during on-site in-person due diligence meetings for a potential merger.”
However, the startup’s founder and CEO, Mahmoud Noah, has called the allegations surrounding their removal by the board “fake propaganda,” according to an official statement issued through Noah’s official Facebook account.
“Given the recent rumors that we were fired for being absent from work for a week, this business document is conclusive evidence to destroy the claims that we were never CEOs and that the statements made concerning us were untrue,” the statement reads.
Noah, who had previously shared a photo from Capiter’s business registry, further remarked “It’s clear that everyone who lied and slandered against us did so to win a personal war against us, and there are many other factors at play here that are intended to exert pressure on us; we’ll get into the specifics as time goes on. Why have we made it this far if we are so inept?”
Capiter’s Board Fires Founders
Meanwhile, Capiter’s holding company’s board of directors recently approved a motion to remove co-founders Mahmoud and Ahmed Nouh from their positions as CEO and COO, effective September 6th. Furthermore, the Board of Directors has appointed Maged Al-Ghazouli, Capiter’s Chief Financial Officer, to serve as interim CEO until Mahmoud and Ahmed Noah appear in person before the Board, shareholders, and investors to address concerns from employees, suppliers, creditors, and other stakeholders, as well as to continue negotiations with the entity planned to merge with Capiter.
The decision was made public on the same day that several local media sources and social media posts started claiming that the founders had fled overseas with company funds.
None of these reports has been corroborated by the board. In a press statement, they cited the founders’ “inability to fulfill their fiduciary duties over the past week and failure to report to representatives of the Board and shareholders during on-site in-person due diligence meetings for a potential merger.”
Capiter’s Founders Deny Any Wrongdoing
However, CEO Mahmoud Noah denied all allegations in a televised phone call to Amr Adib’s El Hekaya talk show yesterday, adding that he has yet to receive official notice from the board that he or his brother has been removed from their positions.
“I am still the CEO of the company,” Mahmoud assured Adib.
Capiter spent the majority of the $33 million raised in their Series A round last September on operations, according to Noah, and he has records to prove it. He also described how most of what is said on social media is false, and most he and his brother attended board meetings virtually from Dubai, where his job requires him to be the majority of the time.
Noah was hesitant to share details about the company’s struggles, including last year’s mass layoffs, blaming the war in Ukraine and current economic difficulties for the majority of Capiter’s difficulties.
According to him, most of what is said on social media is false, and most of Capiter’s problems are the result of the “war in Ukraine” and “current economic struggles.”
However, Mahmoud’s account differs from reports from within the company, which describe a failing structure and an inability to onboard new merchants as the founders quickly ran out of money. Some Capiter employees have also taken to social media to express their dissatisfaction with unpaid salaries and mass layoffs.
In response, he stated that, while some employees had “resigned” since this began, all salaries had been paid up to Monday, September 4th.
Expert Reveals Possible Cause of the Dispute
Similarly, the MBC Egypt program Hekaya, hosted by Amr Adib, scrutinized the views of Mohamed Nagati, an investor and entrepreneurship expert, on the current Capiter crisis and its impact on Egypt’s entrepreneurship sector and emerging companies.
According to Najati, the problem at Kapiter stemmed from a disagreement between the company’s founders and investors. However, the problem was not addressed in the usual way, and no single solution was agreed upon to address it.
According to Nagati, Egypt’s entrepreneurial sector is transitioning from a growth stage to a “sifting” stage, which is common in all emerging economies around the world. He also stated that it is common for companies to fail, liquidate their assets, and exit the market.
Nagati denied that the Capiter issue will have an impact on Egypt’s entrepreneurial climate, which has returned more than fifty billion pounds in US dollars to Egypt over the last ten years and employed approximately one million Egyptians in its various sectors.
Regarding what will happen to Capiter after its crisis, Najati stated that if one of its parties is unable to agree to control the entire company, the solution will be an external entity that will take over the company and restructure it.
Capiter’s Website is Down
The B2B e-commerce startup which raised $33 million in a Series A round co-led by Quona Capital and MSA Capital last year, continues to battle for survival, relief from its current turbulent times appears to be out of reach, as its website has been shut down since today.
An attempt to access the website resulted in the error message “This site cannot be reached,” regardless of whether access was sought for the Capiter website via desktop computer, laptop computer, or Smartphone.
The company has not stated the reasons for the website’s inability to function properly.