In a recent development in the BharatPe-Ashneer Grover saga, the fintech unicorn has initiated civil and criminal action against Ashneer Grover, the company’s now-ousted co-founder, his wife Madhuri Jain Grover, who was the company’s former head of controls, and Grovers’ relatives in relation to the misappropriation of company funds. 

BharatPe confirmed the news to Fortune India. “BharatPe has initiated civil and criminal action against erstwhile co-founder and managing director, Ashneer Grover, former head of controls, Madhuri Jain Grover, and other connected parties of their family for various claims, including misappropriation of company funds,” a BharatPe spokesperson said.

“We have full faith in the courts and authorities and are confident that justice will be done. As the matter is sub judice, we have no further comment to offer at this stage,” the spokesperson added. 

The company has also reportedly asked the Grovers to repay ₹88.6 crore with 18% on the swindled funds. The board had earlier alleged Grover and his family of “extensive misappropriation” of company funds. The fintech company in May this year said, “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.” 

The issue dates back to January this year when the Sequoia Capital-backed fintech firm initiated the corporate governance review and appointed auditing firm Alvarez & Marsal (A&M), and law firm Shardul Amarchand Mangaldas & Co to help the board and management with its governance review. It also roped in consulting firm PwC to determine "wilful misconduct and gross negligence by a former founder".

The audit report claimed that Madhuri, who was then the head of controls in the company, authorised payments to vendors and consultants who were non-existent. She allegedly used company funds to finance her personal expenses, including beauty treatments, electronic devices and vacations for her family, and paying her personal staff. 

The audit report also mentioned the Directorate General of GST Intelligence (DGGI) searched BharatPe's head office on October 21, 2021, and sought details on payments to certain vendors. In response, the company had then told the GST authorities that the vendors in question do not exist. Following this, in late February this year, Madhuri was removed from her position as the head of controls at BharatPe and her ESOPs were cancelled by the fintech firm. 

Notably, the fiasco between BharatPe and Ashneer Grover began in January this year, as Grover got into a tiff with Uday Kotak after voice recordings of him verbally abusing an executive of the latter’s bank surfaced. In the recording, Grover can be heard threatening the Kotak Mahindra Bank personnel after failing to receive a loan from the lender, which he intended to invest in the bumper Nykaa IPO.

After the incident, in February, Grover went on a hiatus till March-end, and so did Jain a week later. In March, the BharatPe board sacked Grover from all positions, including his title as the founder of the fintech firm. However, Grover alleged that CEO Suhail Sameer colluded with the company’s investors and manipulated him into taking a leave, and demanded Sameer to be removed from the company. 

In May, the fintech company had initiated "necessary action" against former co-founder Ashneer Grover to claw back his restricted shares as per the shareholders' agreement.

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