BharatPe founder Ashneer Grover and head of controls Madhuri Jain Grover misappropriated funds from the startup “in order to enrich themselves and fund their lavish lifestyles,” the board of the startup said in a media statement on Wednesday. The statement said that Grover timed his resignation early Tuesday morning to avoid fallout from the imminent release of a governance review that shed light on this alleged misappropriation, and “quickly shirked responsibility” by casting his departure as one fuelled by ‘spooked’ investors.
The board has claimed in its statement that it was Grover’s own actions that led to his departure from the startup he founded: “The Board will not allow the deplorable conduct of the Grover family to tarnish BharatPe’s reputation or that of its hard-working employees and world-class technology. “As a result of his misdeeds, Mr. Grover is no longer an employee, a founder, or a director of the company,” the statement said.
The board said it reserved the right to take legal action against the founder and his family.
Ashneer Grover told Entrackr in an emailed statement that the board’s statement “comes from a position of personal hatred and low thinking,” adding that the “only thing lavish about me is my dreams and ability to achieve them against all odds through hard work and enterprise”.
Ashneer Grover and Madhuri Jain Grover weren’t the only beneficiaries of this alleged misappropriation, the board 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 and grossly abused company expense accounts,” the company said.
Details of this alleged misappropriation had already been made public by a leaked report by the firm Alvarez & Marsal, which is auditing the company as a part of the review of its governance.
Downplaying Grover’s strong association with the firm’s success so far, the board insisted that the company would go on to flourish without his involvement. “The success of BharatPe is a result of the collective effort of a large team of dedicated and talented professionals, and not any one individual,” the board said, adding that the company would enjoy “continued success”.
Grover has been under fire since January, when an anonymous account on Twitter posted what it claimed was audio footage of him screaming at a Kotak Wealth Management employee for the firm’s failure to get him shares from the anticipated Initial Public Offering of Nykaa. Until his resignation on Tuesday, Grover had been on leave from the company, even as details of governance issues in the company leaked to the press. Grover has hit the wider limelight as one of the ‘sharks’ on the Indian adaptation of Shark Tank recently.
Normally, the threat of strong legal action by the board would involve the clawback of funds siphoned off by the Grovers, one would expect. With the issue of the 9.5% stake held by Ashneer Grover in the firm also likely to be an issue in future fund raises, it remains to be seen what route the antogonists take in this case for a resolution that works for all stakeholders.
“I hope the Board can get back to working soon — I as a shareholder am worried about the value destruction. I wish the Company and the Board a speedy recovery,” Grover said.
