Automobile after-sales service startup GoMechanic co-founder Amit Bhasin on Wednesday admitted to errors in financial reporting, following which a forensic audit has been ordered and a business restructuring undertaken which will see 70 per cent of the 1,000-odd workforce being laid off. Nearly two years after it raised a mammoth USD 42 million in funding, it emerged that GoMechanic cooked its financial books by inflating revenues.

In a post on LinkedIn, Bhasin said founders got "carried away" in their quest for exploring opportunities to grow.

"Our passion to survive the intrinsic challenges of this sector, and manage capital, took the better of us and we made errors in judgment as we followed growth at all costs, including in regard to financial reporting, which we deeply regret," he wrote without giving details of the misreporting.

A forensic audit has been ordered to gauge the magnitude of the financial misreporting.

Besides the retrenchments, the startup has reportedly asked the remaining employees to work without pay for the next three months.

"We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions," Bhasin wrote.