The recent controversy at BharatPe has drawn a lot of attention over the last few weeks. Since the start of the year, Ashneer Grover has been at the center of the controversy.
Ashneer Grover has now claimed that the board is arm twisting him into exiting the company and the board is further hurting the integrity of the Bharat Pe. He called the facts “misrepresented and baseless”. While the Chairman of Bharat Pe Rajnish Kumar believes the whole strategy of Ashneer is to make out a case that the governance review is biased against him.
Ashneer Grover has also claimed that the Board members and CEO of Bharat Pe Suhail Sameer are plotting to oust the Co-founder. While the co-founder Shashvat Nakrani confirmed that he has not given any consent or demanded the removal of Suhail Sameer from the board
As per the latest reports, the controversy has also led to the exit of Madhuri Jain, Grover’s wife who headed controls at Bharat Pe. This termination was under charges of misappropriation of funds and authorization of inflated bills and producing fake invoices. The reasons also included billing the company for personal beauty treatment and trips abroad. Bharat Pe has cancelled all her 244 unvested and 56 vested employee stock options (ESOPs).
Where did it all start?
It all started after an audio clip blew up on social media where the founder was allegedly heard abusing and threatening a Kotak Mahindra bank’s employee. However, Ashneer Grover has claimed the audio clip to be fake and an act of the scamster which was addressed in his ‘Chill Folks” tweet. In the midst of this, he has taken a voluntary leave till March 2022.
This event sparked a series of controversies and many new facts came to light.
Corporate Governance concerns at PhonePe raised by auditors
Already making the headlines, questions have been raised over the corporate governance of the company. BharatPe then went on to hire Alvarez & Marsal (A&M) a risk advisory firm for the audit and governance review. According to a report submitted to BharatPe Board by Alvarez and Marsal, there are some issues in the operational matters and instances of financial irregularities at BharatPe.
There were two key “issues” pertaining to BharatPe highlighted in the report:
- Recruitment consultants and Panipat connection
As per the reports provided by Alvarez and Marshal, Bharat Pe pays a fee to recruitment consultants. However, the issue arises when employees have revealed that they had no interaction with any consultants in the process and have no knowledge of their existence. As per the report, there were three instances when the payment was made to the consultant. Madhuri Jain, Wife of Ashneer Grover received these and forwarded them to the accounting team. These invoices were created by Shwetank Jain who is the brother of Madhuri Jain Grover.
Shockingly these consultants do not have any website, no public presence, and there are similarities in the invoices as well. One of these invoices hints towards Panipat the hometown of Madhuri Jain.
So, all these consultants were fake?
With the facts in the reports, it seems that way.
- Vendors went missing too?
The report further questions the total expenditure of Rs 53.25 crore made towards 30 vendors that do not exist. This resulted in the company incurring losses of Rs 10.97 crore in these dealings.
Now the question arises on why was BharatPe dealing with non-existent vendors in the first place. And also why did the company settle the matter for a loss without making any efforts to recover the money from any vendors.
Bharat Pe is a fintech startup founded by Ashneer Grover and Shashwat Nakrani in 2018. The company is involved in interoperable QR codes for UPI payments, Bharat Swipe (POS machine) for card acceptance, and small business financing. While the Ashneer Grover is ready to accept the exit at the price of Rs.4000 Cr the problems for the Grover family looks far from over.
