A day after Ashneer Grover, co-founder and managing director of BharatPe, sent his resignation letter to the board, the New Delhi-based fintech company said in a statement that the Grover family engaged "in extensive misappropriation of funds". The company also said that Grover would no longer be an "employee, a founder or a director of the board".
In response, Grover said on Wednesday afternoon that the "personal nature of the statement" from the board was "appalling". Grover also said that he is worried about the value destruction that BharatPe is currently undergoing.
"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 in a statement.
Earlier in the day, an official who wished not to be named, also said that Grover’s unilateral resignation had triggered his shareholder agreement with BharatPe.
“As per his shareholder’s agreement (SHA), Grover has to take consent from the board and majority investors, which he didn’t do so before resigning. Therefore, his SHA agreement has been triggered -- which means there will be a clawback on the restricted shares which is 1.4%,” he added.
Mint and VCCircle reported earlier today that Grover's restricted share units, equivalent to 1.4% stake, would be held back if the PwC report found incriminating evidence against him. Grover's shares that were due to vest from March to September 2022 - equivalent to 1.4% of his stake - would lapse if the board found 'cause' against him.
“Mr. Grover is no longer an employee, a founder, or a director of the company," the Bharat Pe board said in a statement.
"The company has taken strong objection to Mr. Grover spinning lies and hurling baseless allegations and threats. 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 account and grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles," the board said.
"The company reserves all rights to take further legal action against him and his family," the statement added.
On Monday night at around 11:56 pm, Grover received the agenda for Bharat Pe's Board meeting that included the submission of the PwC report, regarding his conduct and actions based on it. However, 5 minutes later -- at around 12:04 am (Tuesday), he sent out his resignation to the BharatPe board, as reported.
The board had not accepted Grover’s resignation and did not comment on the specifics of the PwC report.
In a long scathing letter on Tuesday, Grover accused investors of being "far removed from reality" and treating founders as "slaves".
"The fundamental fact is that all of you as investors are so far removed from reality that you’ve forgotten what real businesses look like. Your outlook towards BharatPe has been limited to the small window on your Zoom meetings application, far removed from the sweat of the brow that goes into making BharatPe the business leader that it is", Grover's letter on Tuesday said.
On Wednesday, Grover said that he was appalled by the personal nature of the company's statement.
"I am appalled at the personal nature of the company’s statement, but not surprised. It comes from a position of personal hatred and low thinking. I think the Board needs to be reminded of $1M of secondary shares investors bought from me in Series C, $2.5M in Series D and $8.5 M in Series E. I would also want to learn who among Amarchand, PWC and A&M has started doing audit on ‘lavishness’ of one’s lifestyle? The only thing lavish about me is my dreams and ability to achieve them against all odds through hard work and enterprise. 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," he said in a statement.
Read the full BharatPe statement here:
BharatPe is fully committed to its employees and customers and looks forward to its continued success as a Fintech leader in India.
In order to uphold the highest governance standards, and in light of complaints received, the Board of BharatPe directed a thorough review of the company’s internal controls. This extensive review is being led by well-respected and independent external advisors.
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 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 account and grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles.
The company reserves all rights to take further legal action against him and his family.
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 Board remains highly focused on supporting the growth and continued success of the company. The Board is taking all necessary steps to further strengthen the company’s corporate governance, including the appointment of an audit committee, an internal auditor, and the implementation of other key internal controls. 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. We are confident that the company is marking the beginning of a new chapter in its success–one grounded in trust and integrity–and we are excited to embark upon this next leg of our journey.
