An internal investigation has found former managing director (MD) and co-founder, Ashneer Grover, and certain members of his family guilty of financial fraud, BharatPe said in a statement on Wednesday, 2 March.
Grover responded in a LinkedIn post saying he is appalled at the personal nature of the statement, but not surprised. "It comes from a position of personal hatred and low thinking," he said.
"As a result of his misdeeds, Mr Grover is no longer an employee, a founder, or a director of the company," the $3 billion fintech company said in its statement, adding that it reserves all rights to take further legal action.
This comes a day after Grover shot a scathing email to the fintech company's board informing them of his immediate resignation.
Last week, BharatPe had sacked Madhuri Jain Grover, Head of Controls and Ashneer's wife.
Fraud To Fund His 'Lavish Lifestyle': BharatPe
BharatPe, in its statement, confirmed that its board had directed a thorough review of the company’s internal controls, in light of recent complaints.
"This extensive review is being led by well-respected and independent external advisors," it said, referring to Alvarez & Marsal and PwC which conducted the preliminary probe and the main investigation respectively.
"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 expense account and grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles," said BharatPe.
Responding to the allegations, Ashneer Grover posted a photo of bedding on the floor. "I get invited by friends with open hearts to their homes, where I have no qualms sleeping on the floor," he wrote.
"I would also want to learn who among Amarchand, PWC and A&M has started doing audit on ‘lavishness’ of one’s lifestyle? The only thing lavish about me is my dreams and ability to achieve them against all odds through hard work and enterprise," he wrote in his post.
BharatPe's statement also suggested that Grover sent his resignation letter minutes after he got wind that the incriminating results of the internal investigation would be submitted to BharatPe's board.
"Minutes after Mr 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," it said.
BharatPe added that is taking all necessary steps to strengthen the company’s corporate governance, "including the appointment of an audit committee, an internal auditor, and the implementation of other key internal controls."
Grover & Family
The independent probe by Alvarez and Marsal had earlier brought to light two instances of fraud, according to Mint. One is the irregularities in recruitment and second revolves around paying non-existent vendors.
The company was recruiting staff but paying a network of HR consultants that had nothing to do with the hiring, and appear to be linked to each other as well as to Madhuri jain Grover, according to the publication.
In multiple instances Madhuri Grover appeared to have directly received the invoices created by her brother Shwetank Jain, which she forwarded to the accounts team for payment.
The investigation also reportedly found that nearly Rs 51 crore was paid to 30 vendors who appeared to be fictitious.
When caught by the Directorate General of GST Intelligence (DGGI), the company didn't contest, but instead paid close to Rs 11 crore in dues along with penalties, the report says. Deepak Jagdishram Gupta, responsible for procurements at the company and Madhuri’s brother-in-law, seems to have handled this matter.
In his resignation statement on Tuesday, Grover said, "I hereby resign as the MD of BharatPe, effective immediately. I also resign as a director of the board. I will continue as the single largest individual shareholder of the company."
"I write this with a heavy heart as today I am being forced to bid adieu to a company of which I am a founder. I say with my head held high that today this company stands as a leader in the fintech world."
He insisted he was innocent and a victim of baseless and targeted attacks by BharatPe's management.
"Since the beginning of 2022, unfortunately, I’ve been embroiled in baseless and targeted attacks on me and my family by a few individuals who are ready not only to harm me and my reputation but also harm the reputation of the company, which ostensibly they are trying to protect."
Grover and his wife had both gone on a two-month leave, after an audio clip went viral in which he allegedly threatened and hurled abuses at a Kotak Mahindra Bank employee for failing to secure shares during Nykaa's IPO.
Grover initially called it a "fake audio by some scamster trying to extort funds," but later deleted his tweet. The bank said that it was exploring legal action against him for using inappropriate language against its staff.
(With inputs from Mint.)