BharatPe has remove its co-founder Ashneer Grover of all positions for its allege “misdeeds” and may take further legal actions, including clawing back of some of his shareholding.
BharatPe, which allows shop owners to make digital payments through QR codes, in a statement said Ashneer Grover resign after receiving the agenda for an upcoming board meeting that include submission of an independent audit regarding his conduct.
The Board of the company met last evening, and the meeting went past midnight, following which a statement was issue.
BharatPe said it reserves the right to take action base on the report’s findings.
“The Grover family and their relatives engage in extensive misappropriation of company funds, including, but not limited to, creating fake vendors through which they siphoned money away from the company’s account and grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles,”.
Minutes before midnight of 1st March 2022, Ashneer Grover got an email inviting him for a board meeting at 19:30 on 2nd March 2022.
At 12:05 on Tuesday, Ashneer resign.
Sources said the Board of BharatPe took note of the termination of employment of Ashneer Grover as a consequence of his resignation from the post of managing director as well as a director on the company board.
But, since Ashneer resign without the approval of the board and majority investors, consequences under the shareholder agreement have now triggered, they said, adding this could mean that the company is within its right to claw back shares up to 1.4 percent.
Ashneer Grover currently owns a 9.5% stake in BharatPe, while his co-founder Shashwat Nakrani owns 7.8%.
Investor Sequoia Capital India is the largest shareholder in BharatPe with a 19.6% stake, follow by Coatue at 12.4% and Ribbit Capital at 11%.
Ashneer Grover said he was appalle at the personal nature of the company’s statement but not surprised.
Ashneer Grover Said :
“It comes from a position of personal hatred and low thinking,”.
“I would want to learn who among Amarchand, PwC and A&M has started doing an audit on ‘lavishness’ of one’s lifestyle?”
BharatPe, which has engage a law firm and risk advisory consultants to conduct a more detailed investigation after allegations of financial irregularities, last month sack Madhuri Jain, head of controls and wife of Ashneer Grover, for alleged financial irregularities, including using the company funds for personal visits abroad, beauty treatments, buying electronics and paying for helps employed at her residence.
The company statement alluding to the lavish lifestyle may have referred to Jain’s misuse of funds.
A preliminary internal investigation has pegged the magnitude of the financial misconduct at over Rs 50 crore.
PricewaterhouseCoopers (PwC) alongside Alvarez & Marsal (A&M) is doing the audit.
Ashneer Grover Said :
“only thing lavish about me is my dreams and ability to achieve them against all odds through hard work and enterprise”.
Ashneer went on to state that he would want the Board to be remind “$1 million (approx. Rs. 8 crore) of secondary shares investors bought from me in Series C, $2.5 million (approx. Rs. 19 crore) in Series D and $8.5 million (approx. 64 crore) in Series E”.
Ashneer Grover Said :
“I hope the board can get back to working soon – I as a shareholder am worried about the value destruction. I wish the company and the board a speedy recovery,”.
Ashneer Grover, who was on 19th January 2022 sent on a two-month leave of absence following allegations of using abusive language against Kotak Mahindra Bank staff and fraudulent practices, had fil an arbitration plea with the Singapore International Arbitration Centre (SIAC), claiming the company’s investigation against him was illegal.
The emergency arbitrator (EA) last week reject all the five grounds of his appeal, denying him a single relief.
He resign from BharatPe on Tuesday.
Just days before this, Ashneer wife who helm procurement, finance and human resources from the company’s early days, was fir following the review and her ESOPs were cancel.
BharatPe said to uphold the highest governance standards, and in light of complaints received, the Board direct a thorough review of the company’s internal controls.
BharatPe Said :
“Minutes after Mr Ashneer Grover received notice that some of the results of the inquiry would be presented to the Board, he quickly shirked responsibility by sending an email to the Board, submitting his resignation and fabricating another false narrative of the events to the public,”.
“The company has taken strong objection to Mr Grover spinning lies and hurling baseless allegations and threats”.
The company said it reserves all rights to take further legal action against him and his family.
“The Board will not allow the deplorable conduct of the Grover family to tarnish BharatPe’s reputation or that of its hard-working employees and world-class technology,”
“As a result of his misdeeds, Mr Grover is no longer an employee, a founder, or a director of the company.”
Ashneer Grover has reportedly made many allegations on BharatPe board members and investor Sequoia Capital.
According to a media report, Ashneer Grover has said if he starts speaking then Sequoia will not be able to make a single investment in India, and there will be ED and CBI behind them.
BharatPe Said :
“The Board remains highly focused on supporting the growth and continued success of the company. The Board is taking all necessary steps to further strengthen the company’s corporate governance, including the appointment of an audit committee, an internal auditor, and the implementation of other key internal controls,”.
The success of BharatPe, it said, is a result of the collective effort of a large team of dedicated and talented professionals, and not anyone individual.
