Ashneer Grover is a famous name nowadays. Though Grover has been recognized popularly as the Co-founder and MD of Bharatpe, the recent popularity of Grover is due to the fact that he is a judging investor on the reality TV show “Shark Tank India”. The show is the Indian adaptation of Shark Tank, which was famous worldwide, originating from the west. The show offers a clear view of the natural attitudes of venture capitalists in the business world. Here, Ashneer is probably the most famous shark in the Indian adaptation of Shark Tank.
Ashneer is a straight face investor who just speaks when he can add value, but when he speaks, he is brutally honest and mostly rash with words. He is the human adaptation of the idiom, “When it rains, it pours”. Shark tank is one of the hottest shows right now.
Recently Ashneer is also making news for some other things at his organisation. The BharatPe founder has been in the headlines for multiple reasons. The board of directors and other key people are also in the limelight for some questioning. This article talks about the series of events that happened and the consequences which the events took.
A Little Brief about the Ashneer Grover Controversy
Ashneer Grover Vs The Board of BharatPe
Why is BharatPe Under Scrutiny of RBI?
Ashneer Grover and Kotak Bank Controversy
Grovers and the Allegations Against Them
A Little Brief about the Ashneer Grover Controversy
The headlines have been covering Ashneer and the company a lot recently. The news is that the Co-founder of BharatPe, who is also the current MD, Ashneer Grover has written to the board of directors to remove Suhail Sameer from the board. Suhail is a co-founder too and he is also the current Chief Executive Officer of the Fintech startup BharatPe. There has been a lot of ruckus around the company.
When Ashneer Grover went on a voluntary leave in January, Suhail was made in charge of operations at the headquarters located in New Delhi. Suhail was also promoted to the post of Chief Executive Officer in August last year. All of this ruckus started when Ashneer engaged in a controversial audio clip with a Kotak Mahindra bank employee where he abused him in an alleged call over the financing for the Nykaa IPO. His voice circulated all over social media and he was also criticized severely. Ashneer was eventually asked to take a voluntary leave of absence till the end of March along with his wife and some other Bharatpe employees, which eventually turned to a mandatory leave of absence. Besides, the news was also ripe that the board of directors is in an attempt to scrutinize the financial frauds that Ashneer, his wife, and some other employees, who are allegedly involved with the same and this might also see Ashneer and his wife out of the company along with the others.
He responded strongly to the matter. He was also individually and independently examined for his governance in the company.
According to Ashneer, he is being arm-twisted into venturing out from the startup he built along with Suhail. He also mentioned that he was the one who chose Suhail to be the key person in the company and now Suhail is siding with the board to expel him.
Ashneer also replied that if the company wants to expel him, he wants his worth out of the company. At a valuation of 6 billion dollars, the 9.5% of shares that Ashneer has stands at ₹4000 crores. If the company wants to buy him out, it needs to put his ₹4000 crores on the table, he explained.
According to the recent updates dated February 23, 2022, regarding the financial frauds that entangled Mr and Mrs. Grover along with some other BharatPe employees, Madhuri Jain Grover, the wife of Ashneer Grover, was fired by the Board of BharatPe due to alleged irregularities and has also cancelled the ESOPs vested with her. Though an official statement from the company is still pending, Madhuri's termination has been confirmed by a spokesperson close to the matter.
Ashneer Grover Vs The Board of BharatPe
Ashneer was in the news with a lot of headlines. One of the headlines was the board of a company trying to remove him from the startup. In the initial stage, the board realised that the company funds are being mishandled or tampered with. This is why they decided to put Ashneer and Madhuri Grover and some other employees on a mandatory leave of absence. On further investigation and when other controversies surrounded the founders and a list of its other employees, the Board then wished to remove Ashneer and Madhuri from the company along with some other BharatPe executives. To this, Ashneer replied that he has done nothing wrong and the allegations that the board and the media posted were all wrong. "The allegations had no rhyme and no reason", he reported.
He admitted that the culprit in the issue is not himself and he further admitted that Suhail was the person who had to be expelled from the company. He said that Suhail was choosing the side of the board of directors to remove Grover as a key person in the company. Suhail deserves to be expelled from BharatPe. It was also brought to notice that Ashneer was the person who believed and entrusted Suhail in managing the company.
According to Ashneer, he is being arm-twisted into leaving the company. Even then, he has no problem or issues in leaving the company but he wants the company to first payout his share.
He said that if the company wants me to step out, then he wants his share of 4000 crores on the table. He thinks that his time is too important to be stuck somewhere in internal politics. He wants to focus on building more and he is not in the retirement stage.
Harini Rao
Why is BharatPe Under Scrutiny of RBI?
One might think that the issue is around Ashneer Grover and the company. In some sense, one might think that the whole topic is Ashneer Grover Vs. the Board of BharatPe. It is not wrong but it is also not completely true. As the fight of words started between the company and Grover, a string of issues were ignited. The fire also ignited other issues surrounding the whole company, BharatPe.
There were financial authorities asking for credibility in sources of revenue and accounting norms from the company. The company was being screened for corporate governance issues if any.
The flight of issues was such that the RBI had to be involved. The Reserve Bank of India is examining the company to check any discrepancies. RBI is checking if any Corporate Governance rules were violated. If they discover anything fishy about some rules being violated, the company can get a big shock. Along with the awaked goodwill, the RBI can stop future mergers of BharatPe with any other entity.
It was alleged that there existed some financial irregularities at the FinTech startup. The issues and allegations got unearthed very recently during the investigations by risk management authorities and other financial regulatory bodies. One of the most notable authorities in investigations is Alvarez and Marsal, a management and risk advisory firm. The firm had already declared that there were inconsistencies in billing in dealings with the vendors. Besides, Alvarez and Marsal also found that there were payments from the company to vendors whose identities are faked.
As per the latest update dated February 23, 2022, from the sources close to the matter, Ashneer Grover's wife Madhuri Jain Grover, who headed the Controls of Bharatpe, has been fired on the grounds of financial misappropriation. The probe that was ongoing on behalf of the BharatPe Board stated that Madhuri had used the company funds to fund her personal travels, on skincare products, and to buy expensive electronics goods. Furthermore, the report also includes her alleged expenditure of the company money worth Rs 1 crore for her holiday travels.
Ashneer Grover and Kotak Bank Controversy
The co-founder and managing director of BharatPe, Ashneer Grover stepped down from the daily operations in the company in January. This was followed by a voluntary turned mandatory leave of absence from the company until the end of March.
On leave. Back on 1st April pic.twitter.com/qzD2Ot4OD9
— Ashneer Grover (@Ashneer_Grover) January 19, 2022
This was the time when he sparked a lot of controversies. One of the controversies was even a legal spat between Grover and Uday Kotak (Kotak founder).
The first time Grover started a controversy was the time when an audio file was leaked. Ashneer Grover was allegedly abusing a Kotak employee in the leaked audio file. That was the first instance when the cofounder at BhartPe sparked controversy and was quickly spotted on the headlines. Nothing has been proved yet but the news is out there reporting some blowing facts and figures. Grover however explained that all of that was fake.
The audio call headlines got more air when a legal notice surfaced on the news. The notice was from Grovers to Kotak and was dated November 30. This event further made the issue visible to the general public.
Both were seeking compensation claiming that Grovers decided to invest Rs 500 crores in Nykaa IPO through the bank’s IPO financing services. Grover claimed that the bank failed him in financing for the Nykaa IPO. Even then, he had no problem or issues in leaving the company but he first wanted the Board or somebody from the company to buy him out his share. The company at the present time stands at a valuation of $6 billion, as per Grover's estimates. Ashneer says that he is happy to leave once he is paid his share of Rs 4000 crores. The board of directors is yet to reply to this statement. Moreover, Grover has hired three legal firms to be legally protected in these times. The cloud allegations are still hovering over the Grovers.
Grovers and the Allegations Against Them
Investors at the FinTech firm BharatPe are not liking it with Grover and they are even mostly ready to give his payout to leave the company. As the issue moved further, Ashneer came to the sidelines and the company was in the front of headlines.
There was a preliminary investigation that was done by some external experts in the matter and they highlighted not just one but two big issues associated with the finance technological company.
The two allegedly fraudulent persons who are associated with the company are the Grovers - Ashneer Grover and Madhuri Grover (his wife) who made the cloud of allegations more strong. Madhuri, however, is linked in both the fraudulent issues found by investigators.
The report was helmed by Alvarez and Marsal, a management and risk advisory firm. The report was dated 24 January 2022, and was submitted to the BharatPe board. The Mint reported on 30th January, that the board had arrived at a decision to end the services of Grover based on the preliminary report submitted by Alvarez and Marsal, even as it had commissioned a comprehensive report.
Those two allegations that the company has pushed to Grovers were of financial wrongdoings. The two major grounds on which they were troubled were irregularities in retirement and other allegations were about non-existing vendors on the platform.
An examination of just two of the vendors pegged the amount paid by BharatPe for undelivered services at close to ₹4 crores. Grovers still maintains silence over all the allegations that point to them. The Grovers and BharatPe have not responded yet to the mentioned allegations.
Among all the headlines, Ashneer says that he is being arm-twisted into stepping down and he has done nothing wrong to the company and the society. He says that he is still the finest person to run the company. However, it is taken into notice that Ashneer has hired three legal firms to support him in a fight with the board of the company. He has hired Karanjawala, Ritin Rai and Meraki law to make himself legally prepared for any future proceedings.
A&M’s report found out that there were about Rs 51 crores that were paid to 30 vendors who were really non-existent. These payments and transactions were caught by the directorate general of GDT Intelligence or DGGU. The company on top of that also did not contest the demand for service tax, instead, they paid about Rs 11 crores in dues.
The primary investigation also found some irregularities in the workings of the company and the issue of non-existent vendors.
They found that this entailed an overall expense related to the 30 vendors of approximately ₹53.25 crores (under validation). The company reversed the claimed input credit of 9.54 crore rupees and paid a penalty of 1.54 crores rupees. A&M has also recommended to the board that these issues require a much deeper investigation and analysis as to why the company was dealing with ‘non-existent vendors’ in the first place.
Conclusion
All these leaks here and there point to more and more issues in the bricks of this behemoth organisation. Further investigations are being carried out to get a more clear picture of the whole issue and the resulting consequences. Right now most reports have no rhythm and reason and investigations are continuing.
FAQs
Is Ashneer out of Shark Tank?
Ashneer has confirmed that his deals are not affected by the controversies.
Who is BharatPe CEO?
Suhail Sameer is the current CEO of BharatPe.
Is Ashneer Grover out of BharatPe?
No, the fintech startup has denied any rumours regarding the termination of the company's co-founder, Ashneer Grover.
Source :- https://startuptalky.com/ Author :- Harshit Verma Date :-February 23, 2022 at 12:15PM