So far, BharatPe, a fintech startup, has ousted co-founder Ashneer Grover from all roles, accusing his family of misappropriating the company’s funds on a large scale.
External consultants had assessed the company’s internal controls, according to BharatPe, and Mr Grover quit shortly after learning that the findings would be given to the company’s Board of Directors. Creating fictitious vendors to syphon money away from the company’s expense account to fund luxurious lifestyles as part of the Grover family’s alleged abuse of funds.
Mr Grover wrote in his resignation letter that he is being “vilified and degraded in the most despicable manner.” He further claimed that the founders were treated as “slaves” by the company’s investors.
Mr Grover resigned as managing director and a director of the board of directors, but he stated that he will remain the company’s “single largest individual shareholder.”
How did it all start?
An audio clip of Mr Grover allegedly scolding a Kotak Mahindra Bank employee for failing to raise cash to buy Nykaa shares during the company’s Initial Public Offering (IPO) appeared online early in January 2022. The co-founder of BharatPe replied to the audio clip by labelling it a hoax. Mr Grover will face legal action, the lender announced on January 9, 2022.
Following the uproar, the company announced that Mr Grover had taken a leave of absence until the end of March of his own volition.
What are BharatPe’s problems?
Mr Grover’s emergency appeal against a review of the company’s governance was denied by the Singapore International Arbitration Centre before he resigned (SIAC). In his plea, he said that the members of the committee assessing the company’s governance appeared to be prejudiced. Mr Grover’s appeal was dismissed on all five grounds by the emergency arbitrator.
Since the audio clip was released, BharatPe has been in a squabble with co-founder Mr Grover. Madhuri Jain Grover, Mr Grover’s wife and BharatPe’s head of controls were fired from the fintech firm amid charges of money laundering. She was accused of spending business funds on family vacations overseas as well as paying her personal employees.
Mr Grover also appeared on a television reality show in India promoting entrepreneurship, which aired around the same time as the controversy erupted, drawing even more public attention. On the show, the BharatPe co-founder was viewed as an overly nasty and severe judge, raising concerns about the prospect of toxic work culture at his firm.
Who is Ashneer Grover?
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Mr Grover was the Chief Financial Officer at Grofers, a grocery delivery firm that is now known as Blinkit, before co-founding Bharat. He has also worked as an investment banker for a long time. Mr Grover received his schooling from famous institutions such as the Indian Institute of Technology in Delhi and the Indian Institute of Management in Ahmedabad.
What is the reach of BharatPe?
Over 75 lakh retailers across 150 cities use BharatPe’s services. Mr Grover and Shashvat Nakrani co-founded the company in 2018, and it provides fintech products such as interoperable QR codes for payments and small business funding. Since its inception, the company has facilitated the issuance of nearly 3,000 crores in loans to its merchants. Too far, BharatPe has raised $ 178 million in equity and debt.
The company’s current market capitalization is $2.8 billion.