- Allegedly, BharatPe’s co-founder and MD Ashneer Grover and his wife had missed out on Nykaa’s IPO due to a lack of margin funding from Kotak Mahindra Bank and wanted Rs. 500 crore in damages.
- An audio clip emerged on social media on January 5th, 2022. Apparently, Grover was found hurling expletives and death threats to the bank’s employee over a phone call.
- The bank said that it had replied to the notice that was sent in October on time, but it is about to pursue legal action against Grover.
Kotak Mahindra Bank on Sunday said it is pursuing “legal action” against co-founder and managing director of the fintech Bharatpe Ashneer Grover and his wife Madhuri in connection with the abusive call matter.
The lender acknowledged that the couple had on October 30 sent a legal notice to it, without elaborating on the reasons for the same. According to media reports, the couple had accused the bank of failing to secure finance and allocation of shares in the Nykaa initial public offer (IPO) and sought Rs 500 crore in damages.
“This notice was received by us and was replied to appropriately at the time, including placing on record our objections to inappropriate language used by Grover. Appropriate legal action is being pursued,” a media statement from the city-headquartered lender said.
“To the shock and surprise of our clients, on October 28, 2021, after having repeatedly assured our clients that the shares of FSN (Nykaa’s parent firm) would be allotted to them, Kotak informed our clients that it would not be able to provide financing for the Nykaa IPO,” Ashneer Grover’s legal team wrote to Kotak Mahindra Bank in October.
“Kotak’s refusal to comply with its assurances was on the pretext that it had decided not to finance the Nykaa IPO due to ‘erratic FII movements’ and ‘very high lending rates’,” as per the notice.
According to them, Kotak’s “eleventh-hour” denial of IPO financing to Grover cost him a “business/investment opportunity about which they had informed Kotak more than a month in advance of the launch of the IPO”.
Further, the notice added that Kotak Mahindra Bank’s statement that it has not provided IPO financing to any individual for the Nykaa IPO is blatantly false and incorrect, since Suhail Sameer, the CEO of BharatPe, was provided with this service.
On January 5th, 2022, an audio clip emerged on social media. It was a phone recording between Ashneer Grover and a Kotak Mahindra Bank employee. Apparently, Grover repeatedly abused the bank employee and was upset about missing out on Nykaa’s shares during the IPO. He was found hurling expletives and death threats to the employee for missing out on a margin funding for Nykaa’s IPO.
On January 6th, 2022, Grover claimed on Twitter that the recording is fake and that someone is trying to extort money from him. “Folks. Chill! It’s a FAKE audio by some scamster trying to extort funds (US$ 240K in bitcoins). I refused to buckle. I’ve got more character. And Internet has got enough scamsters,” Grover said on Twitter.
On January 7th, 2022, he deleted the tweet, since the audio clip was also not there on social media anymore.
On January 9th, 2022, Kotak Mahindra Bank communicated that it will take legal action against Grover. The bank had stayed away so far from commenting on the matter.
“Notice was received by us and was replied to appropriately at the time, including placing on record our objections to inappropriate language used by Mr. Grover. Appropriate legal action is being pursued”, the bank said.
When contacted, a spokesperson for Bharatpe declined to comment on the developments.
“Your clients have, in the recent past, on several occasions called our client’s employees on the phone and had issued threats to their lives, besides using unparliamentary and foul language, for which our client and its employees reserve their rights to take appropriate legal steps as they may be advised,” Kotak said in a 2 November response to Grover’s legal notice sent on 30 October.
“Our clients had proposed to apply for subscription to the shares of FSN in the name of both Mr. Ashneer Grover and Ms. Madhuri Grover, for shares worth ₹250 crore each,”
“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,” as per the legal notice sent by Sumit Agrawal, partner, Regstreet Law Advisors, on behalf of Mr. Grover.
“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,” said Kotak.
“Our clients vehemently deny the defamatory allegations pertaining to any unparliamentary or foul language having been used by our clients, or that our clients have issued any threats to your clients or its representatives whatsoever. It is evident that your clients have concocted these allegations merely as a counterblast to the claims made by our clients for the breach of various legal obligations committed by your clients,” Grover’s lawyers said in response.
Grover stated that all banking relations will be withdrawn with Kotak Mahindra Bank.
BharatPe serves over 75 lakh merchants across 150 cities. The company has already facilitated the disbursement of loans totalling over Rs 3,000 crore to its merchants since its launch. BharatPe has raised over USD 650 million in equity and debt, to date.
Its investors include Tiger Global, Dragoneer Investment Group, Steadfast Capital, Coatue Management, Ribbit Capital and others.
