BharatPe vs Ashneer: Madhuri Jain fires 2nd salvo against board, governance audit

Madhuri Jain Grover, the wife of BharatPe co-founder Ashneer Grover and recently sacked head of controls at the company, has raised questions over the governance review that led to her ouster on grounds of embezzling company funds. Shortly after her termination, Jain had called out the top brass of BharatPe for wrongly targeting her in what she called a “witch hunt”.

Jain was removed from her position as the head of controls at BharatPe and cancelled her ESOPs on Wednesday after a governance review report by Alvarez and Marsal flagged misappropriation of funds by her. The report claimed that she 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 action was based on a review report by risk advisory firm Alvarez and Marsal, which was roped in last month to look into governance discrepancies at BharatPe. The report was later leaked, leading to allegations of bias and prejudice by Jain and Grover.

BharatPe has also hired PwC earlier this month for an independent audit of the company’s finances. This is being seen as a crucial turn of events as Grover and Jain may be ousted from the company if they are indicted by an audit firm.

Questioning the governance review report, Jain drew attention to the GST-related irregularities in the report. “The leaked A&M (Alvarez and Marsal) report talked about GST. Why is board silent about it now? Is it because it’s backfired on two of its favourites Suhail Sameer and Sumeet Singh who were actually handling it and now on the Governance Review committee? (sic)”

The audit report had mentioned that the 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 told GST authorities that the vendors in question do not exist.

One of her posts targeted Rajnish Kumar, the chairperson of BharatPe board and former chairman of State Bank of India, over leaked information in the probe against her and Grover. “Mr Rajnish Kumar – what’s the governance review process under your chairmanship where everything is leaked? Board minutes, appointments of 3rd parties, A&M report, termination letters, arbitrations? I never heard of so many leaks in your whole tenure at SBI. What’s broken? (sic)”

Jain tweeted audio clips of a call between her husband and co-founder Bhavik Koladiya where the latter can supposedly be heard using expletives after being denied a meeting. The call supposedly originated from the residence of BharatPe board chairman Rajnish Kumar. Grover has earlier blamed Koladiya for exploring parallel negotiations amid his feud with the company’s board.

Jain also shared a screenshot of a WhatsApp chat between Grover and CEO Suhail Sameer where the latter is purportedly asking for her resignation at the behest of BharatPe investors.

The fiasco began 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, Grover went on a hiatus till March-end, and so did Jain a week later. However, the BharatPe co-founder alleged that CEO Suhail Sameer colluded with the company’s investors and manipulated him into taking a leave. He even demanded Sameer to be removed from the company.

Since long, Grover has been at loggerheads with his company’s board, being obstinate in refuting all allegations against him. He has called out chairman Kumar for being biased against him, which the latter has termed untrue.

Grover has also stated that he will exit from BharatPe in lieu of ₹4,000 crore for his 9.5% stake, and is reportedly in talks to sell the stake to an investor.

This boardroom war has, in turn, caused disillusionment among employees regarding the work culture, which some have even called toxic. Several BharatPe employees across sectors such as business, finance and technology are believed to be looking to leave the company.

Meanwhile, CEO Sameer has assured the staff that the company is well-positioned to continue its growth story with enough cash reserves at its disposal. In a recent internal communication, the BharatPe chief executive told employees that the Delhi-based fintech player has $500 million in the bank, including $100 million invested in Unity Small Finance Bank, which is four times what has been spent on the company over the last three years.