The story so far: Fintech company BharatPe on March 2 removed co-founder Ashneer Grover from all positions of the company, accusing his family of extensively misappropriating the company’s funds.
BharatPe said that external advisors had reviewed the company’s internal controls, and Mr. Grover resigned shortly after he was informed that these findings will be presented to the company’s Board. The Grover family’s alleged misappropriation of funds included creating fake vendors to siphon money away from the company’s expense amount to fund lavish lifestyles.
In his resignation letter, Mr. Grover said that he is being “vilified and treated in the most disgraceful manner”. He also added that the company’s investors have treated the founders as “slaves”.
Mr. Grover resigned from his posts of managing director and a director of the board but added that he will continue as the “single largest individual shareholder of the company”.
How did it all start?
Early in January 2022, an audio clip allegedly of Mr. Grover abusing an employee of Kotak Mahindra Bank for failing to secure funds to buy shares of Nykaa during the company’s Initial Public Offering (IPO) surfaced online. The BharatPe co-founder reacted to the audio clip by calling it fake. On January 9, 2022, the lender said that it will take legal action against Mr. Grover.
Following the controversy, the company announced that Mr. Grover had taken voluntary leave till the end of March.
What are the troubles of BharatPe?
Before his resignation, Mr. Grover’s emergency plea against a review of how the company was governed was rejected by the Singapore International Arbitration Centre (SIAC). In his plea, he had alleged that the members of the committee reviewing the governance of the company seemed biased. The emergency arbitrator rejected all five grounds of Mr. Grover’s appeal.
BharatPe has been embroiled in a tussle with co-founder Mr. Grover ever since the audio clip came to light. Madhuri Jain Grover, the wife of Mr. Grover and head of controls at BharatPe, was sacked from the fintech company on allegations of misappropriation of funds. She was accused of using company money for family trips abroad and for paying her personal staff.
Mr. Grover also appeared on a television reality show promoting entrepreneurship in India that was telecast around the same time when the controversy boiled over, attracting even more public attention. The BharatPe co-founder was seen as an excessively rude and harsh judge on the show and his behaviour raised questions about the possibility of a toxic work culture at his company.
Who is Ashneer Grover?
Before co-founding BharatPe, Mr. Grover worked as the Chief Financial Officer at Grofers, a grocery delivery service now called Blinkit. He also has extensive experience working as an investment banker. Mr. Grover completed his education from prestigious institutes like IIT Delhi and IIM Ahmedabad.
What is the reach of BharatPe?
BharatPe has over 75 lakh merchants using its services across 150 cities. The company was co-founded by Mr. Grover and Shashvat Nakrani in 2018 and offers fintech products like interoperable QR codes for payments and small business financing. The company has facilitated the disbursement of loans of over ₹3,000 crore to its merchants since its launch. BharatPe has also raised $ 178 million in equity and debt, to date.
The company is currently valued at $2.8 billion.
