Kotak case: BharatPe’s Ashneer Grover goes on leave till March-end

“Kotak’s refusal to provide IPO financing to our clients for the Nykaa IPO constitutes a blatant violation of its legal obligations owed to our clients as their wealth managers,” the legal notice said.

BharatPe will continue to be led by its existing CEO Suhail Sameer and the rest of the management team will remain intact.
BharatPe will continue to be led by its existing CEO Suhail Sameer and the rest of the management team will remain intact.

BharatPe co-founder and MD Ashneer Grover, who was recently embroiled in a controversy over the use of alleged abusive language against an employee of Kotak Mahindra Bank, has taken voluntary leave till March-end, a statement from the company on Wednesday said. BharatPe will continue to be led by its existing CEO Suhail Sameer and the rest of the management team will remain intact.

“Ashneer has co-built BharatPe from scratch and his decision is consistent with his passionate commitment to the future success of the company. For now, the Board has accepted Ashneer’s decision which we agree is in the best interests of the company, our employees and investors, and the millions of merchants we support each day,” the statement added.

Grover’s decision comes weeks after an alleged audio recording surfaced on Twitter, in which he can be heard hurling verbal abuses at an employee of Kotak Wealth Management for missing out on financing for the IPO of FSN E-Commerce Ventures, which operates online fashion and wellness company Nykaa.

A day after the audio clipping surfaced on social media, Grover issued a statement claiming that the viral clip was “fake” and that he was a victim of a “scamster” who allegedly released the audio on social media. 

Later, media reports confirmed that he and his wife Madhuri had sent a legal notice to Kotak Wealth Management through the law firm, RegStreet Law Advisors.

In the legal notice, RegStreet Law Advisors’ partner Sumit Agarwal said his clients (Ashneer Grover and Madhuri Grover) had proposed to apply for subscription to the shares of FSN (Nykaa) for shares worth `250 crore each. The bank allegedly didn’t keep up with the promises, the legal suit added.

“Kotak’s refusal to provide IPO financing to our clients for the Nykaa IPO constitutes a blatant violation of its legal obligations owed to our clients as their wealth managers,” the legal notice said.

This coincided with the Kotak group coming out in support of the employee who was allegedly verbally abused by Grover over phone. Kotak said in a media statement on January 10 that it intends to take legal action against the BharatPe co-founder over abusive language and death threats.

Kotak Wealth Management, which was represented by law firm Khaitan and Co, said in response to Grover’s legal notice that it “reserves the right to pursue legal action for the threats to the lives of its employees”. “Our client denies that there has been any breach on its part with regard to any financial assistance that has been alleged by you or otherwise. Your clients are well aware that financial assistance is at the sole discretion of the lender and that there is neither any concluded contract nor any sanction letter executed in favour of your clients,” Kotak said in its legal response to the lawsuit.

BharatPe is funded by inventors such as BEENEXT, Sequoia Capital, Insight Partners, Steadview Capital Management, Ribbit Capital, and Coatue Management, among others, and has already raised close to $700 million in equity and debt financing.

Currently, BharatPe operates a UPI-based QR code payment system for consumers and merchants. It also sells BharatSwipe, a point of sale (PoS) device and buy-now-pay-later (BNPL) product named PostPe.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.