By Salman SH

Highlights

-In a statement to the press, BharatPe also accused Grover and his family members of “extensive misappropriation of company funds”.

-The fintech start-up’s statement comes a day after Grover wrote a detailed letter of resignation to the board on Tuesday night. 

-Grover resigned minutes after receiving the agenda for upcoming board meeting that included submission of the PWC report regarding his conduct 

Fintech unicorn BharatPe on Wednesday said that it reserves all rights to take further legal action against ex-CEO and MD Ashneer Grover and his family members for “extensive misappropriation of company funds”. In its statement to the press, the start-up said that the Grover family and their relatives created fake vendors through which they allegedly siphoned money away from the company’s account and “grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles”.

The fintech start-up’s statement comes a day after Grover wrote a detailed letter of resignation to the board on Tuesday night. His resignation also came just minutes after receiving intimation of an upcoming board meeting agenda, which included consideration of action against him based on an investigation report into allegations of financial irregularities submitted by advisory firm PwC.

“Minutes after Mr. Ashneer Grover received notice that some of the results of the inquiry would be presented to the Board, he quickly shirked responsibility by sending an email to the Board submitting his resignation and fabricating another false narrative of the events to the public. The company has taken strong objection to Mr. Grover spinning lies and hurling baseless allegations and threats.,” the statement added.

Furthermore, the start-up also accused the Grover family of creating fake vendors through which they allegedly siphoned money away from the company’s account. “(Grover)…grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles,” the company said.

“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 added.

BharatPe said that the board of directors will now look to further strengthen its corporate governance, including the appointment of an audit committee, an internal auditor, and the implementation of other key internal controls. 

In his letter to the board on Tuesday night, Grover said that he is quitting as MD “effective immediately” due to “baseless and targetted attacks” against him and his family. He also took a dig at BharatPe investors, accusing them of using the board investigation as a “charade” to defame him. Prior to the investigation, Grover had gone on a voluntary leave of absence from BharatPe till March end.

The letter to the board came just a day after Grover’s emergency arbitration plea before the Singapore International Arbitration (SIAC) was dismissed. In his plea, Grover had sought quashing of the BharatPe board’s investigation into the alleged financial fraud and mishandling of company funds.

The SIAC plea was largely seen as Grover’s attempt to seek indemnity for many future liabilities while selling his stake back to the company.

The emergency arbitrator (EA) of the special arbitration court, however, rejected all five grounds of his appeal and declined to provide any relief. Grover is now expected to move the Delhi High Court bench.

Grover was represented by Karanjawala & Co, while BharatPe was represented by senior counsel Abhishek Singhvi.

In his pleas before the SIAC, Grover had said the “review committee” formed by the BharatPe board earlier this month to look into the allegations of financial fraud was violative of the terms approved under the shareholder’s agreement (SHA).

The embroiled legal tussle between BharatPe board and Grover began two months ago after an audio clip surfaced where he was allegedly heard hurling abuses at an employee of Kotak Wealth Management over the bank’s inability to secure financing for the IPO of Nykaa.