Ashneer Grover’s leave opens a pandora’s box; BharatPe calls for calm

Amidst ongoing boardroom upheaval at BharatPe, the fintech company has released a statement acknowledging that it is currently conducting an independent audit of the company’s “internal processes and systems''.

BharatPe, through its legal firm, Shardul Amarchand Mangaldas has appointed Alvarez and Marsal, a leading management consultant and risk advisory firm to advise the Board on its recommendations,” the statement adds, requesting the media not to speculate until audit findings have been completed.

BharatPe’s statement comes in following co-founder and MD Ashneer Grover taking a voluntary leave of absence and his wife Madhuri Jain Grover, who is the head of controls, also going on leave while the independent audit is being conducted. The news, citing anonymous sources, also claims that the scope of the audit has now transcended beyond Grover’s personal dispute with Uday Kotak and Kotak Mahindra Bank. That possibly makes Ashneer’s return to the $3-billion fintech company “increasingly difficult”.

It also insinuates that Ashneer Grover’s dispute and voluntary leave that followed has opened a Pandora’s box of large-scale corporate governance issues — including the possibility of “inflating” some transactions done on its payments gateway, and some “fake” vendors. Allegedly, “when a merchant recorded a transaction, BharatPe may have inflated the value of these transactions”.

A news agency earlier said that the IPO-aspiring company is conducting an independent audit to assuage investor consternation which ensued after Ashneer Grover’s alleged misconduct. Specifically, the audit aims to ascertain whether the brass is “making proper internal disclosures about personal investments and checking for conflicts", which could “lead to a new code of conduct,” according to sources quoted by the agency. The investors have purportedly expressed apprehension that Grover’s personal dispute may have damaged BharatPe’s reputation as well, especially when the company was going to file for an IPO in the next 18 months, the source claims.

BharatPe CEO Suhail Sameer told in an interview that the board is united in its dealing of the “Ashneer Grover issue”. He has also said that while Ashneer has remained a central figure in the company since its outset, “any company does not run solely on one individual.” The company will conclude its independent audit and review on March 31, when Grover’s leave of absence ends. Meanwhile, the statement from BharatPe reads, “The Board strongly believes in protecting the interests of all stakeholders, including customers, employees and partners.”

For the uninitiated, Ashneer Grover is at loggerheads with Uday Kotak and his eponymous bank because of the latter’s alleged inability to secure funds worth ₹500 crore which Grover needed to invest in Nykaa’s blockbuster IPO last year. Grover has alleged that the request was rejected at the “eleventh hour”, while the news agency claims that it has seen documents where the bank has claimed that it refused his request because of “very high lending rates”

However, the matter unenviably came to light when an audio clip was doing the rounds on the internet, where Ashneer Grover was allegedly hurling expletives at a Kotak Mahindra employee for not giving him funds, and threatened to stage a police encounter to get him killed. What fanned the flames was a media report claiming that Grover and his wife sent a legal notice to Uday Kotak and the bank, seeking damages. Reports also said that the bank acknowledged the receipt of such a notice and reserves the right to take legal action against Grover for his use of unparliamentary language with an employee.