BharatPe’s co-founder and managing director Ashneer Grover has resigned from the company, just days after the fintech startup terminated the services of his wife and the company’s head of controls, Madhuri Jain Grover, over alleged financial irregularities.
In a statement, BharatPe said Grover’s resignation came “minutes” after receiving the agenda for the upcoming board meeting “that included submission of the PwC report regarding his conduct and considering actions based on it”. The company added that the Board “reserves the right to take action based on the report’s findings”.
The development also comes close on the heels of Grover’s emergency arbitration plea, challenging BharatPe’s decision to conduct a corporate governance audit at the company, being rejected by the Singapore International Arbitration Centre (SIAC).
Why has Ashneer Grover resigned from BharatPe Board?
In his resignation letter, Grover alleged the board of the company had “ousted” him for their “vested interests”. He alleged that recent developments related to the company seem to be a “battle of egos being played to the gallery of the media under the charade of ‘good governance’”. Grover also alleged the “investor template” to make an “unwanted” founder go away, is to make the founder “the villain of the piece”, something he claims is being done to him.
“Today I am being vilified and treated in the most disgraceful manner,” Grover wrote in the letter.
He said the views of the board members, on business and problems on the ground, have been “coloured by the windows of the Ivory Tower in which you all reside”.
“The fundamental fact is that all of you as investors are so far removed from reality that you’ve forgotten what real businesses look like and have no appreciation for what it took to run this enterprise day in and day out. Your outlook towards BharatPe has been limited to the small window on your Zoom Meetings application, far removed from the sweat of the brow that goes into making BharatPe the business leader that it is. None of you, including the ones based in India, have ever been to our office even once, since the pandemic turned our lives upside down and sought to suffocate the economy. Not even once,” Grover wrote in his resignation letter.
The Indian Express reached out to Grover for his comments, but is yet to receive a response.
Will Ashneer Grover continue to hold shares in the company?
In his resignation letter, Grover is learnt to have said he would continue as the single largest individual shareholder of the company. Grover owns a 9.5 per cent stake in BharatPe, and as per the company’s last fundraise, his stake was worth Rs 1,800-Rs 1,900 crore.
What does this mean for BharatPe?
The Indian Express had reported earlier that the Board of BharatPe planned to invoke certain clauses in the shareholders agreement to terminate Grover’s employment and divest him of a certain amount of this stake. The fact that Grover has said he will continue to hold on to his equity in the company, even as he steps down from the MD post, points to a potential fizzling out of talks over the company acquiring Grover’s stake. Grover currently owns 9.5% stake in BharatPe, while his co-founder Shashwat Nakrani owns 7.8%. VC investor Sequoia Capital India is the largest shareholder in BharatPe with 19.6%, followed by Coatue at 12.4% and Ribbit Capital at 11%. In addition to these three, Tiger Global, Steadview Capital and Beenext have also backed BharatPe, and together these marquee investors hold 60.4% stake, as of August last year.
What led to the tussle between BharatPe and Ashneer Grover?
In early January, an audio clip surfaced of Grover allegedly using expletives against a Kotak Bank staffer. While he claimed the clip was fake, the bank said it would take legal action over it.
Two weeks later, Grover went on a voluntary leave of absence until March-end. This happened after an e-mail thread between Grover and Sequoia (BharatPe’s largest shareholder), highlighting differences between the two parties, came to light.
Meanwhile, Grover’s wife Madhuri was also sent on a leave of absence.
Later in January, BharatPe roped in independent auditors to look into the company’s practices under Grover. A preliminary report by firm Alvarez & Marsal accused Madhuri of financial fraud in February.
On February 23, BharatPe sacked Madhuri on the charges of fund misappropriation.
Last week, the Singapore International Arbitration Centre (SIAC) rejected Grover’s emergency plea against the ongoing governance review.
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