Fintech player BharatPe has reiterated its stand to claw back the restricted shares of its co-founder and now ousted former CEO Ashneer Grover. The company said there's no change in this decision and it will pursue all steps under the law to protect its right.
The Sequoia Capital and Tiger Global-backed unicorn's statement comes after a media report, which claimed a settlement has been reached between Grover and BharatPe. It said the fintech will not claw back Grover’s shares now, which is a reversal from its earlier decision to rescind his shares in the company.
“This is in reference to a malicious story filed without verification by a publication. As announced in May, the company has initiated necessary action against the former founder to claw back his restricted shares in accordance with the terms of the shareholders’ agreement. There is no change in this decision and the company will pursue all steps under the law to protect its right. We urge the media to exercise restraint while reporting on such inter-se shareholders’ corporate matters and not refer to rumours," BharatPe says in a statement.
Grover holds an 8.5% stake in the company. According to reports, Grover is set to lose 1.4% of equity as a result of BharatPe invoking the claw back clause, which amounts to around ₹300 crore. The BharatPe board had earlier accused Grover and his family of "extensive misappropriation" of company funds, including creating fake vendors "through which they siphoned money away from the company’s expense account".
Amid bitter tussle, BharatPe on May 10 had decided to initiate all "necessary action" against Ashneer Grover to claw back his restricted shares as per the shareholders' agreement. The BharatPe board sacked Grover from all positions, including his title as co-founder of the fintech firm in March. Before he was sacked from the company, Grover, who's the single largest individual shareholder in the company, had tendered his resignation. The company also terminated the services of several other employees, who allegedly colluded with vendors and indulged in suspicious transactions to enrich themselves, according to a corporate governance probe.
Before Ashneer Grover, the company had terminated the services of Madhuri Jain Grover, Ashneer's wife and the head of controls at the fintech unicorn, citing misappropriation of funds. It had even vowed to file criminal cases against "some of these employees" for the misconduct and act of cheating committed against the company.
In January 2022, the BharatPe board initiated the corporate governance review of the company. It appointed Alvarez & Marsal (A&M), a global professional services firm known for its work in turnaround management and performance improvement, and law firm Shardul Amarchand Mangaldas & Co. to help the board and management with its governance review. It also roped in consulting firm PwC to determine "wilful misconduct and gross negligence by a former founder".
After a two-month review, the BharatPe board recommended several measures, including a new code of conduct for senior management and employees to strengthen overall governance in the company; a new and comprehensive vendor procurement policy; and key personnel appointments, including a chief human resource officer and regular internal audits.
