Clawing Back Shares, Legal Battle and More

Payments agency BharatPe on Wednesday mentioned its erstwhile managing director and co-founder Ashneer Grover was “no longer an employee, founder or director” and that he and his household had indulged in “extensive misappropriation of company funds”.

The assertion drew the curtains on weeks of sniping between the outspoken govt and the corporate, which dragged in board members, traders, and co-founders and engulfed the corporate in an unseemly public spectacle. While it began with a leaked cellphone dialog through which Grover was heard abusing a Kotak banker, he and his household now face critical fraud.

While Grover resigned early on Tuesday morning, the corporate mentioned that was minutes after he acquired the agenda for the board assembly scheduled for later that day, which was to contemplate the findings of an unbiased governance assessment on the agency.

BharatPe Looks to Claw Back Shares

According to an ET report, the funds agency is seeking to claw again its cofounder Ashneer Grover’s restricted shares within the firm.

AoA Provisions to Buy Back Shares

The AoA of the three-year-old firm has the supply for eradicating a founding member for a trigger, and his fairness will be purchased again by the corporate at a good market worth, an individual with direct data of the matter advised Mint earlier.

The provision will be invoked if the trigger entails gross negligence or willful misconduct as decided by a Big Four accounting agency. This is why the board has introduced in PricewaterhouseCoopers to conduct a forensic audit of its accounts.

Grover at the moment holds roughly 8.5 per cent stake in BharatPe. Of this 1.4 per cent shouldn’t be vested, based on the individuals quoted above. These shares alternatively can be transferred to an worker welfare belief at cheaper price or on the worth paid by the related founder.

The firm defines restricted shares as 75 per cent of the founder’s shares after BharatPe’s Series C funding in 2019 and follow-on shares issued on the closing of Series E funding.

What Does the PWC Report Say?

In its investigation, PwC can be discovered to have checked out particular issues flagged by unbiased advisory agency Alvarez & Marsal (A&M) over misappropriation of funds. A&M was employed by BharatPe by way of its authorized agency Shardul Amarchand Mangaldas.

Although the board assembly occurred on Tuesday night time, the corporate has not disclosed the selections taken — and whether or not a primary info report can be filed primarily based on the audit report.

After the corporate’s public of economic misconduct on Wednesday, Grover mentioned: “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.”

Legal Battle Awaits

In the statement, BharatPe said to uphold the highest governance standards, and in light of complaints received, the Board directed a thorough review of the company’s internal controls.

“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, ” it said. “The company has taken strong objection to Mr Grover spinning lies and hurling baseless and threats”.

The company said it 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,” it mentioned. “As a results of his misdeeds, Mr Grover is now not an worker , a founder, or a director of the corporate.”

Grover’s Allegations on Sequoia

Grover has reportedly made a number of on BharatPe board members and investor Sequoia Capital. According to a media report, Grover has mentioned if he begins talking then Sequoia won’t be able to make a single funding in India, and there can be ED and CBI behind them.

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