BharatPe’s co-founder Ashneer Grover may lose his shares amidst the ongoing boardroom battle. Grover and his family members have been declared “guilty of fraud” after an internal governance review in a prepared statement by the company.
A preliminary investigation by Alvarez and Marsal (A&M) has found at least two instances of fraud at BharatPe, linked to Ashneer Grover’s wife and the firm’s controller until recently, Madhuri Grover. The report found close to Rs. 51 crores paid to non-existent vendors, which was flagged by the Directorate General of GST Intelligence (DGGI). The report says that the company didn’t contest but instead paid close to Rs. 11 crore in dues and penalties. Deepak Jagdishram Gupta, responsible for procurements at the company and Madhuri’s brother-in-law, seems to have handled this matter.
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There were also irregularities in recruitment in at least three instances as the company invoices showed “consultants” from recruitment firms being paid, but the interviewees denied being recruited through the stated consultants or any knowledge of them. The fee for these consultants was being invoiced to the company under Swetank Jain’s name (Madhuri Grover’s brother). A&M noted that Madhuri Grover had directly received the invoices from the vendors and forwarded these to the accounts team for payment. The estimated amount for just two vendors amounted to a whopping four crores.
Highlights from BharatPe’s statement: “The Grover family and their relatives engaged 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 to enrich themselves and fund their lavish lifestyles.”
- “Minutes after 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 board will not allow the deplorable conduct of the Grover family to tarnish BharatPe’s reputation… As a result of his misdeeds, Grover is no longer an employee, a founder, or a company director.”
Grover responds: Ashneer Grover said he was “appalled but not surprised” by the “personal nature” of the company’s statement, adding that it came from a position of “personal hatred and low thinking.”
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“The board needs to be reminded of $1 million of secondary shares investors bought from me in Series C, $2.5 million in Series D, and $8.5 million in Series E. I would also want to learn who among Amarchand, PwC and A&M has started doing audits on ‘lavishness’ of one’s lifestyle?” Grover said.
Grover may lose 1.4% in uninvested stock options if the PwC investigation report tabled at a board meeting finds evidence of misconduct against him.