BharatPe co-founder Ashneer Grover faces a new setback in his efforts to ward off a board investigation as his emergency plea before the Singapore International Arbitration Centre (SIAC) has been dismissed by the special court, according to news reports.

In his plea, Grover had sought quashing of the BharatPe board’s investigation into 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.

A PTI report quoting anonymous sources said that the emergency arbitrator (EA) of the special arbitration court has rejected all the five grounds of his appeal and declined to provide any relief. Grover is now expected to move the Delhi High Court, the report added.

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

In his pleas before the SIAC, Grover 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 plea also quoted various clauses under the SHA and the articles of association (AoA) between Grover and the company as the primary basis to strike down the independent committee appointed by the board. In addition, it sought an order directing the BharatPe board “not to rely on the reports delivered by the Review Committee in its current form and constitution…”.

Grover also sought the SIAC’s intervention to keep in abeyance the appointment of Suhail Sameer as director, asking he be restrained from discharging charging any functions as director of the company, pending the arbitration.

Grover’s decision to move the Singapore court came after a fight ensued between the co-founder and the board in January. Earlier this month, the BharatPe board appointed Alvarez and Marsal and PwC to conduct an independent review of management practices and the company’s books.

A preliminary report of the investigation prepared by Alvarez and Marsal and PwC, which indicted Grover and his wife Madhuri Jain (controller of finance) of committing financial fraud was, however, leaked to the media. The report outlined two instances of financial transactions approved by Jain using invoices that were made to “non-existent” vendors.

Prior to this, Grover said he would be taking a voluntary leave of absence from BharatPe till the March end.

The board versus Grover saga gained media attention after an alleged audio recording of Grover surfaced on Twitter, in which the co-founder of the $3-billion company can be heard hurling verbal abuses at an employee of Kotak Wealth Management. In the recording, Grover is believed to have issued death threats to employees and threats of legal action over the bank’s inability to secure financing for the IPO of Nykaa.

(With PTI inputs)