BharatPe Board to take right call after audit, says Rajnish Kumar

Bengaluru: The board of directors at BharatPe, the fintech firm that is mired in controversy surrounding its cofounder Ashneer Grover, will take an ‘appropriate’ call once the ongoing investigation into alleged fraud within the company is completed and the final audit report is submitted, chairman Rajnish Kumar told ET.

“The board will take the right calls within the ambit of the law and in the best interest of the company (BharatPe),”Kumar said on Saturday, breaking his silence on the high-decibel fracas that has triggered an independent investigation offinancial transactions in the company, including irregularities involving Grover's wife Madhuri Jain, who is also BharatPe’s head of controls.

The former State Bank of India (SBI) chairman Kumar, who joined the BharatPe board in October last year, said the board's focus is on what is in the best interest for the company.


“The effort of the board would be to see the company's growth and business remain unimpacted,” he added.

The veteran banker’s comments come at a time when Alvarez & Marsal (A&M) is conducting an audit on BharatPe’s financial practices. ET reported on Friday morning that preliminary findings show at least two instances of fraud at BharatPe where Jain is also involved along with her brother Shwetank Jain.

A&M is expected to submit its final report on its findings this month.

Separately, Grover’s letter seeking removal of current CEO Suhail Sameer from the board-- which was first reported by ET on Friday afternoon-- would also be reviewed as per standard protocol, people in the know told ET.

Kumar declined to comment on this specific matter.

On February 2, Grover had informed BharatPe’s board that he was withdrawing his nomination of Sameer as a director, adding a new dimension to an already raging controversy.

"I, now, in exercise of the power vested in me by Clause 3.7 of the SHA and Clause 91.7 of the AoA do hereby withdraw, my nomination of Suhail Sameer as a Director nominated by me to the Board of Directors of the Company," Grover wrote in the note, which was reviewed by ET.

In addition to cofounders Grover and Shashvat Nakrani, CEO Sameer and Kumar, the board of directors at BharatPe includes Rahul Kishore, senior managing director at Coatue Management; Kewal Kundanlal Handa, the former chairman of Union Bank of India, Sequoia Capital India’s Harshjit Sethi and Meyer Malka (also known as Micky) who is a managing partner at Ribbit Capital.

On Friday evening, BharatPe issued a statement saying it was pained that the integrity of the BharatPe board or individual board members is being questioned, this came in the wake of reports by ET on Grover seeking to remove Sameer from the company’s board as well as on the findings of the preliminary report of A&M.

“The Board in all its actions has followed due process in the best interest of the company," the statement said on Friday evening, adding that (BharatPe) was yet to receive any interim or final report on the ongoing probe.

Rising acrimony

The company is also unlikely to accept Grover’s demand for a pay-out for an amicable exit amid a full-blown corporate battle being played out at the New-Delhi based startup, which was last valued at $2.8 billion.

The initial findings of the A&M report--reviewed by ET—reveals irregularities including payments to non-existent vendors as well as (incorrect) invoices being produced to substantiate spends in the company’s books.

Grover is currently on ‘voluntary’ leave from the company till the end of March. His wife Jain too has gone on leave from the company. The embattled founder has also roped in New Delhi-based law firm Karanjawala & Co to provide legal advice amid mounting pressure on him from the board to leave the company.

In an interview with ET, Grover had said that BharatPe’s investors and board members were ‘spooked’, with the release of his expletive-laced ‘audio clip’, which he continues to maintain as ‘fake’. The leaked viral audio clip saw Grover hurl abuses at a Kotak Mahindra Bank employee for not receiving his financing in Nykaa's IPO.

"I'm happy to participate in anything, as long as it is fair and as per Indian laws. Anything which is extrajudicial or if anyone wants to go overboard, I will not be able to participate. I'm very clear as far as my personal wealth is concerned, it's an open book," he told ET.