This week, the Economic Offences Wing (EOW) of the Delhi Police, in a status report to the Delhi High Court, said there were discrepancies in vendor invoices and stated that some human resource (HR) consultancies involved with the payments company were established to siphon funds from the fintech unicorn.
The eight HR consultancies in question were found to be linked to relatives of Madhuri Jain Grover, the company’s former head of controls and wife of cofounder Ashneer Grover. The investigation is still in its initial stages, the EOW stated.
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The status report has yet again put the focus back on the long-drawn saga between the Grovers and BharatPe, which started in January 2022, with both sides fighting a bitter and public battle in court.
BharatPe takes action
By the end of 2022, BharatPe had initiated three separate legal actions against its embattled cofounder:
- The company approached the Singapore International Arbitration Centre (SIAC) to claw back Grover’s restricted shareholding (1.4%) for terminating his employment without board consent
- The fintech unicorn has also filed a legal suit with the Delhi High Court against the Grovers seeking Rs 88 crore in damages for misappropriation of funds and reputational harm
- Last year, BharatPe had also filed a criminal complaint with the EOW against the Grovers. The department registered a first information report (FIR) in the case in May 2023
The BharatPe side
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- Through the SIAC arbitration, BharatPe is seeking to transfer Grover’s restricted (or unvested) shares, almost 1.4% company stake, to another cofounder, Shashvat Nakrani, for a total consideration of Rs 33.02 lakh
- BharatPe’s Article of Association states that if a founder leaves without board consent, it can clawback the founder’s restricted shareholding at lower fair market value
- In its legal suit, BharatPe said it has been able to “unearth embezzlement to the tune of Rs 81.28 crore” by the Grovers, through its internal investigation
- The fintech alleged that Rs 7.6 crore had been siphoned off between 2018 to 2021 through forged invoices raised by eight “bogus HR consultants” that had a ‘nexus’ with the Grovers
- It has accused Madhuri Jain of misappropriation of funds to the tune of Rs 59.73 lakh towards payment of personal expenses
- The fintech company has also accused the Grovers of “abusing their authority conferred on them and breaching their fiduciary duties”
- Grover, Jain and her brother Shwetank Jain, her sister’s husband Deepak Gupta, and her father Suresh Jain are the five defendants in the suit
Legal cases mount
The legal cases aren’t restricted to just the company. Even the cofounders have filed a legal suit against Ashneer Grover:
- Bhavik Koladiya, BharatPe’s original cofounder, filed a commercial suit against Grover alleging breach of share purchase agreement for creating third-party rights on his unpaid shares
- This amounts to almost 3.1% stake in BharatPe which is part of Grover’s shareholding
- BharatPe’s other cofounder, Shashvat Nakrani, has also filed suit against Grover over his unpaid shares
- The Delhi High Court also refused stay on EOW probe against Grover and his wife Jain
- The Delhi High Court also refused Grover’s request to lift the injunction put by the court, restraining Grover from creating third party rights on disputed shares by Koladiya
Grover’s side
- In an interaction with ET last year, Grover has called the entire matter as a ‘witch-hunt’ by board and management to get him out
- In February, Grover wrote to NPCI against Koladiya alleging data theft
In the meantime
While, BharatPe locks horns in a legal battle against its cofounder, the fintech unicorn has seen several senior exits in 2023:
- In January, BharatPe CEO Suhail Sameer quit, leaving CFO Nalin Negi as interim CFO
- By August, Koladiya had also moved out
- At the same time, the company’s COO Dhruv Dhanraj Bahl also called it quits
- CPO Ankur Jain was the latest to quit, in October
- Other senior exits include Nehul Malhotra, head of buy-now-pay-later product PostPe; Vijay Aggarwal, chief technology officer; Rajat Jain, chief product officer for lending and consumer products, and Geetanshu Singla, vice president, technology
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