Fired Xsolla VP Files Whisteblower Suit Alleging Financial Irregularities

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LOS ANGELES (CNS) - Xsolla Inc. is being sued by a former executive who alleges he was wrongfully fired this summer for reporting alleged internal financial iregularities, including a disbursement of funds from the video game commerce company for a loan to a private account held by the firm's founder.

Plaintiff Emil Aliyev's Los Angeles Superior Court lawsuit alleges whistleblower retaliation and wrongful termination. He seeks unspecified compensatory and punitive damages.

A representative for the Sherman Oaks-based company could not be immediately reached for on the suit brought Wednesday.

Aliyev was hired April 17 as Xsolla's vice president of global accounting and has more than two decades of experience in financial regulations. His job in large part was to ensure Xsolla's compliance with applicable financial rules and regulations, the suit states.

However, shortly after taking the job. Aliyev noticed Xsolla had not passed an IRS audit since roughly 2017 and in May 2023 he learned of alleged illegal financial activity on behalf of Xsolla regarding its account balance deficiencies, including $40 million dollars that was missing between two account balances, according to the suit.

Further investigation by Aliyev showed Xsolla had made several monetary disbursements from company funds to a private Goldman Sachs account held by Xsolla's founder, Alexander Agapitov, the suit alleges.

Aliyev reported his findings to Xsolla CEO Leon Perry, telling him it was unlawful for the company to provide Agapitov with monetary loans without charging a standard interest rate, the suit states.

He also maintained that Xsolla failed to report the approximately $40 million loan to Agapitov to the IRS and although Perry did not dispute the plaintiff's findings, he told the plaintiff, "It is not your problem," the suit states.

In July, Aliyev met with Agapitov and Ketei Marakool, who the plaintiff would later learn was Xsolla's new CFO, the suit states. Like Perry, Marakool acknowledged the issues addressed by Aliyev, but she and Agapitov also took no action to correct the problems, according to the suit.

Aliyev was fired three days after his meeting with Agapitov and Marakool and was told in a subsequent meeting with Perry and a member of human resources that he lost his job "due to an alleged violation of company policy," the suit states.

Aliyev's inquiries about what policy he violated were unanswered, the suit states.

When Aliyev complained to management in August that he was being "unlawfully terminated for reporting financial mishandling," Xsolla refused to investigate or reinstate him, the suit alleges.

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