By Salman SH
The war of words between BharatPe board and co-founder Ashneer Grover continued on Wednesday with the fintech firm stating that the former CEO and MD and his family members had engaged in extensive misappropriation of company funds.
Grover, who resigned from the company on Monday midnight, was quick to retaliate. He accused the board of making statements that come “from a position of personal hatred and low thinking”.
What remains to be seen is the nature of legal action the company proposes to take against Grover and his family members now that the investigation report by PwC and Alvarez & Marsal has indicted him. BharatPe said it reserves the right to take legal action. Grover’s next steps would also be keenly watched particularly when he’s received an initial setback with the Singapore International Arbitration Centre (SIAC) dismissing his plea. It is widely expected that he may approach the Delhi High Court.
A source close to BharatPe said, “As per his shareholder’s agreement (SHA), Grover has to take consent from the board and majority investors, which he didn’t do so before resigning. Therefore, his SHA agreement has been triggered – which means there will be a clawback on the restricted shares which is 1.4%,” he added.
In its statement on Wednesday, BharatPe said that the Grover family and their relatives created fake vendors through which they allegedly 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 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 company has taken strong objection to Grover spinning lies and hurling baseless allegations and threats,” the statement added.
“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, Grover is no longer an employee, a founder, or a director of the company,” the statement added.
BharatPe said that the board of directors will now look to further strengthen the fintech firm’s corporate governance, including the appointment of an audit committee, an internal auditor and the implementation of other key internal controls.
Responding to the board’s allegations, Grover issued a swift statement accusing the board of getting “personal in nature”.
“I am appalled at the personal nature of the company’s statement, but not surprised. It comes from a position of personal hatred and low thinking. I think 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 audit on ‘lavishness’ of one’s lifestyle?” he added.
In a jibe to his former company’s board, Grover further wrote, “I indeed have a very lavish lifestyle. I get invited by friends with open hearts to their homes, where I have no qualms sleeping on the floor. And this is when I am on the road in the US and the UK raising $370 million Series E. And I’ve the right to stay in any lavish hotel and charge it on the company issued credit card in my pocket. Those who haven’t built from scratch will never understand the Founder’s mentality.”
Prior to sending his resignation on Monday night, Grover had said that he is quitting as MD “effective immediately” due to “baseless and targetted attacks” against him and his family. He also took a dig at BharatPe investors, accusing them of using the board investigation as a “charade” to defame him. Prior to the investigation, Grover had gone on a voluntary leave of absence from BharatPe till March end.
The letter to the board came just a day after Grover’s emergency arbitration plea before SIAC was dismissed. In his plea, Grover had sought quashing of the BharatPe board’s investigation into the alleged financial fraud and mishandling of company funds.
The SIAC plea was largely seen as Grover’s attempt to seek indemnity for many future liabilities while selling his stake back to the company.
The emergency arbitrator (EA) of the special arbitration court, however, rejected all five grounds of his appeal and declined to provide any relief.
The embroiled legal tussle between the BharatPe board and Grover began two months ago after an audio clip surfaced where he was allegedly heard hurling abuses at an employee of Kotak Wealth Management over the bank’s inability to secure financing for the IPO of Nykaa.