BharatPe sacks employees, vendors

New Delhi: Payments startup BharatPe on Tuesday said it has terminated several employees and vendors as well as filed criminal cases against them for misconduct besides deciding to claw back former founder Ashneer Grover's restricted shares in the firm.

The steps have been taken by the company's board following a detailed corporate governance review against the backdrop of alleged lapses and misdoings during the tenure of Grover as managing director. IPO-hopeful BharatPe, which allows shop owners to make digital payments through QR codes, has implemented a new code of conduct for senior management and employees and brought in a comprehensive vendor procurement policy to avoid a repeat of alleged lapses that happened when Grover was managing director.

In a statement, BharatPe said it had in January initiated a corporate governance review of the company. Alvarez & Marsal (A&M), a global professional services firm notable for its work in turnaround management and performance improvement, Shardul Amarchand Mangaldas & Co (SAM), India's leading law firm, were roped in to help the board and management with its governance review and PwC, a leading consulting firm to determine wilful misconduct and gross negligence by a former founder.

That review followed allegations against Grover, who had to go on leave in January following allegations of using abusive language against Kotak Mahindra Bank staff and fraudulent practices. In March, it first sacked Grover's wife Madhuri Jain, followed by Grover resigning and the company stripping him of the co-founder and other titles over alleged "extensive misappropriation of company funds" by "creating fake vendors" to siphon money and using "company expense accounts" to "enrich themselves and fund their lavish lifestyles". BharatPe on Tuesday said it has blocked "many vendors involved in malpractices including incorrect or inflated invoices" and has also "terminated the services of several employees in departments who were directly involved with these blocked vendors."

"If required, the company will be filing criminal cases against some of these employees for the misconduct and act of cheating committed by them against the company," the statement said. Without naming Grover, it said necessary action has been initiated "against the former founder to claw back his restricted shares as per the shareholders' agreement. It will take all steps to enforce its right under the law". Grover currently holds roughly 8.5 per cent in BharatPe. Of this 1.4 per cent is not vested. The company did not elaborate on the action being taken. "After a detailed review of the (governance review) report over the last two months, the board of BharatPe has recommended several decisive measures that are being implemented," the statement said, adding the review has identified a set of measures to strengthen internal processes and controls. The measures include a new code of conduct which will apply to senior management and employees. "The code of conduct inter-alia deals with the conflict of interest and other issues that will help to strengthen overall governance in the company."

A comprehensive vendor procurement policy has been formulated to ensure that a robust mechanism is in place for on-boarding and engaging with vendors and mitigate any risk of employees indulging in suspicious transactions to enrich themselves, it added.