BharatPe removes Ashneer from all positions

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 account and grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles

- BharatPe Board

I was 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 would want to learn who among Amarchand, PwC and A&M has started doing an audit on 'lavishness' of one's lifestyle?

- Ashneer Grover

New Delhi: Payment startup BharatPe has stripped its co-founder Ashneer Grover of all positions for his alleged "misdeeds" and may take further legal actions, including clawing back of some of his shareholding. BharatPe, which allows shop owners to make digital payments through QR codes, in a statement said Grover resigned after receiving the agenda for an upcoming board meeting that included submission of an independent audit regarding his conduct. The Board of the company met last evening, and the meeting went past midnight, following which a statement was issued. The company said it reserves the right to take action based on the report's findings.

"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 account and grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles," it alleged. Minutes before midnight of March 1, Grover got an email inviting him for a board meeting at 19:30 on March 2. At 12:05 on Tuesday, he resigned. Sources said the Board of BharatPe took note of the termination of employment of Grover as a consequence of his resignation from the post of managing director as well as a director on the company board.

But, since he resigned without the approval of the board and majority investors, consequences under the shareholder agreement have now been triggered, they said, adding this could mean that the company is within its right to claw back shares up to 1.4 per cent. Grover currently owns a 9.5 per cent stake in BharatPe, while his co-founder Shashwat Nakrani owns 7.8 per cent. Investor Sequoia Capital India is the largest shareholder in BharatPe with a 19.6 per cent stake, followed by Coatue at 12.4 per cent and Ribbit Capital at 11 per cent. When contacted, Grover said he was appalled at the personal nature of the company's statement but not surprised. "It comes from a position of personal hatred and low thinking," he said.

"I would want to learn who among Amarchand, PwC and A&M has started doing an audit on 'lavishness' of one's lifestyle?" BharatPe, which has engaged a law firm and risk advisory consultants to conduct a more detailed investigation after allegations of financial irregularities, last month sacked Madhuri Jain, head of controls and wife of Grover, for alleged financial irregularities, including using the company funds for personal visits abroad, beauty treatments, buying electronics and paying for helps employed at her residence.

The company statement alluding to the lavish lifestyle may have referred to Jain's misuse of funds. A preliminary internal investigation has pegged the magnitude of the financial misconduct at over Rs 50 crore. PricewaterhouseCoopers (PwC) alongside Alvarez & Marsal (A&M) is doing the audit. Grover, however, said the "only thing lavish about me is my dreams and ability to achieve them against all odds through hard work and enterprise". He went on to state that he would want the Board to be reminded "$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 hope the board can get back to working soon - I as a shareholder am worried about the value destruction. I wish the company and the board a speedy recovery," he said.