BharatPe is a Fintech company that mainly caters to small merchants and Kirana stores owners in India. Ashneer Grover and Shashvat Nakrani founded this company on March 20 2018. It facilitates merchants to accept payments via Unified Payments Interface (UPI) through BharatPe QR codes; it also offers loans to small merchants of up to 7 lakhs for 3 to 12 months. In 2020, the company launched a digital gold product that allows users to transact for 24-carat gold containing 99.5% purity.
On March 1 2022, Ashneer Grover BharatPe, co-founder and managing director, resigned from the startup and the board, stating that he was ‘vilified’ and treated in the most disrespectful manner. Later BharatPe released a statement, ‘Ashneer Grover resigned as the managing director from the board director of BharatPe minutes after receiving the agenda for upcoming board meeting that included submission for the PWC report regarding his conduct and considering action based on it. The board has every right to take a step based on the report finding.’
Ashneer Grover’s Resignation
Before Ashneer’s resignation, his wife Madhuri Jain Grover had been terminated as the head of controls over the allegation of fund misappropriation. She called out the senior members just hours after being terminated, alleging a “sexist and misogynistic environment.”
In his letter of resignation, Grover said: “I write this with a heavy heart as today I am being forced to bid adieu to a company of which I am a founder. I say with my head held high that today this company stands as a leader in the fintech world. Since the beginning of 2022, unfortunately, I’ve been embroiled in baseless and targeted attacks on me and my family by a few individuals who are ready not only to harm me and my reputation but also harm the reputation of the company, which ostensibly they are trying to protect.”
On February 27, Singapore International Arbitration Centre blatantly rejected the Grover’s request for arbitration regarding board’s decision of governance review. On the basis of this rejection he further questioned the intention of board to conduct this governance review. On February 28, BharatPe disclosed it had hired Alvarez to conduct a government review of the company, and the very next week, they also roped with PwC.
According to the preliminary report by Alvarez, there were inconsistent in dealing with vendors. There were flagged payments, and vendor and consultant were non-existent. After which Ashneer Grover pointed out Rajnish Kumar as well as Bhavik Koladiya arguing the governance review was biased, the company blamed him for spreading fake information.
Meanwhile, Grover is still the largest shareholder in the company. Currently, the board members and he are in talks of buying out his hares which stands at Rs. 1900 crores in last August while Rabbit Capital owns 11 per cent of shareholdings, Beenexts holds 9.6 per cent, Sequoia holds 19.6 per cent, Coatue holds 12.4 per cent according to data from Tracxn.
When asked in one of the interviews with money control about what led to the decision of quitting Fintech, he called out the whole process a sham. Grover said that there was no consideration of any operation; they were just going after him, his wife, his family. He also stated that none of the investors had called him once and questioned him about how the SBI chairman ran a confidential process for a month.
Ashneer Grover, in conclusion, had a message for all the founders, and that is not to be a slave of VC. He implores all the founders that they are fighting a lonely battle, and it will only get lonelier, and to get their own lawyers and make sure that these investors can do nothing in the worst of the scenarios. And his request to all founders is to maintain more than 51 per cent equity, don’t dilute below that.
Plus, he had also put forward his demands infront of the government stating that: The board meeting should not be conducted on online platform called Zoom. Investors should visit India instead of sitting in their ivory tower elsewhere.
Edited by Prakriti Arora