BharatPe orders independent audit of co-founder’s audio clip amid controversy

Ashneer Grover had recently gone on voluntary leave till the end of March following protests against him for allegedly speaking abusive language to a bank employee.

Amid growing concerns over governance issues, fintech unicorn BharatPe on Saturday announced that it is conducting an independent audit of its internal processes and systems.

The development comes days after BharatPe co-founder and MD Ashner Grover went on voluntary leave till the end of March after he allegedly spoke abusive language to an employee of Kotak Mahindra Bank. Grover’s wife, Madhuri Jain Grover, who heads the controls at BharatPe, was also part of the conversation. She has reportedly also gone on leave. An audio clip on Twitter shows the couple allegedly insulting the manager for failing to get allotment and finance for Nykaa’s IPO. Grover had initially said in a tweet that the clip was fake but later withdrew the comment.

BharatPe has appointed consulting firm Alvarez & Marsal to conduct an independent audit to strengthen internal processes and systems.

“The Board of BharatPe is committed to the highest standard of corporate governance in the company and is conducting an independent audit of the company’s internal processes and systems,” the company said. “BharatPe, through its law firm Shardul Amarchand Mangaldas, has appointed Alvarez & Marsal, a leading management consultant and risk advisory firm, to advise on the recommendations of the Board.”

Many in the industry point out that, in addition to the Kotak controversy, there were growing concerns about the work culture at BharatPe, which was increasingly receiving poor publicity, as well as Grover’s appearance on the popular start-up TV show Shark Tank. During this, we were talking about some of his comments. Pitching for funding seemed rude to entrepreneurs.

According to other sources, BharatPe’s board of directors, which includes former SBI chairman Rajnish Kumar and ex-Union Bank chairman Kewal Handa and investors from Sequoia India, Ribit Capital and Kotyu Management, has been insisting on this for some time now. that Grover needs to leave.

BharatPe said, “The Board firmly believes in protecting the interests of all stakeholders including customers, employees and partners.” “We request the media not to speculate until the audit findings are complete.”

According to Reuters, the audit will assess whether senior BharatPe executives are making appropriate internal disclosures about individual investments and investigate conflicts, leading to a new code of conduct.

According to a Reuters report, co-founder Ashneer Grover has sought damages from Kotak Mahindra Bank chief Uday Kotak alleging that the bank has refused financing for individual investments, following which BharatPe has been subjected to intense investor and media scrutiny has come within range. BharatPe has come under intense investor and media scrutiny after co-founder Ashneer Grover sought damages from Kotak Mahindra Bank chief Uday Kotak, alleging that the bank had funded individual investments, the report said.

Private sector lender Kotak Mahindra Bank in turn said this month that it was taking appropriate legal action in the Ashneer Grover case. Grover who had sent a legal notice to the bank on October 30, 2021, for allegedly failing to provide initial public offering (IPO) financing in the IPO of FSN E-commerce Ventures Ltd., or Nykaa and allotting his shares in HNI/NII Category.

“The (legal) notice we had received and responded appropriately at that time, including lodging our objections to the inappropriate language used by Mr. Grover. Appropriate legal action is being taken,” the bank said in a statement. That said, we would like to confirm that there is no violation or contravention in any manner whatsoever by Kotak Group.

Analysts said such developments do not bode well for the business of BharatPe, which has expanded the reach of its PoS (Point of Sale) business (BharatSwipe) by 25 times to over 250 cities in the past 12 months. Since the launch of its POS business in the second half of 2020, the company has deployed over 125,000 BharatSwipe machines across offline stores. Achieving this feat in a short span of about one-and-a-half years, BharatPe recently said that it has created the fastest ever scale of PoS business in India.