BharatPe settles with Ashneer Grover, to end all ties with former co-founder

BharatPe and its co-founder Ashneer Grover have reached a settlement, ending a protracted legal battle and bitter public disputes between the two parties.

A statement released by the fintech unicorn on Monday said that Grover will not be associated with it in any capacity, dropping the legal suit against him. As part of the agreement, Grover will also not be a part of the shareholding of the Delhi-based company.

The settlement brings to an end years of legal disputes between the fintech firm and the former Shark Tank India judge. Grover, who had served as managing director and co-founder of BharatPe, resigned from his position on 28 February 2022.

A person with direct knowledge of the development told Mint that of the 8.5% stake held by Ashneer Grover and family, around 4% has been given back to the company and the remaining 4-4.5% stake will now be housed under the Grover family trust.

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Grover and his family will retain all rights as common shareholders, and the board will hold the right of first refusal as and when they decide to monetize their stake, the person said, requesting not to be identified.

In a statement issued on social media platform X, Grover said: "...I will no longer be associated with BharatPe in any capacity, nor be part of the capital table. My remaining shares will be managed by my Family Trust. Both parties have decided not to pursue cases filed...".

Also Read: Ashneer Grover’s relative Deepak Gupta sent to judicial custody for 5 days in BharatPe fraud case

A Right of First Refusal (ROFR) clause in a Shareholders' Agreement (SHA) gives existing shareholders the first opportunity to buy shares if a shareholder decides to sell his/her stake. Before offering the shares to an outside buyer, the selling shareholder must give existing shareholders the chance to match the offer.

As part of the settlement, the cases filed by the company and its investors against Grover and family with the Economics Offence Wing (EOW) will be dropped.

The dispute

Since his resignation, Grover and BharatPe have been involved in a public dispute, with both sides levelling accusations. BharatPe’s parent company, Resilient Innovations, alleged discrepancies in vendor invoices and claimed that some HR consultancies associated with the company had been set up to siphon funds from the fintech company. Grover, however, defended himself by calling the entire matter a “witch-hunt” by the BharatPe board and management to remove him from the company, according to media reports.

Additionally, in February last year, Grover wrote to the National Payments Corporation of India (NPCI), accusing BharatPe’s co-founder Bhavik Koladiya of data theft.

Later in November, during the dispute, a lookout circular (LoC) was issued against both Grover and his wife, Madhuri Jain, preventing them from travelling abroad. The couple was stopped at Delhi’s Indira Gandhi International Airport last year while attempting to fly to New York due to financial misconduct allegations.

Plans ahead

Meanwhile, BharatPe wished “Mr. Grover well.”

The company, which has grown more than 5x in revenue, since it raised its last round in August 2021, to $260 million as of March 31, 2024, may target public market listing over the next 24 months.

“With the legal roadblocks to any future fundraising now removed, the company can look at a public market listing. It doesn’t need primary capital as of now,” the person cited earlier said. BharatPe was last valued at $2.7 billion in August 2021.