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Business News/ Companies / News/  BharatPe files arbitration at SIAC against ex-MD Ashneer Grover

BharatPe has filed an arbitration claim in Singapore to claw back the restricted shares allotted to former managing director Ashneer Grover and prevent him from using the title of founder, according to three people familiar with the matter.

The firm on Thursday filed a civil suit against Grover, his wife Madhuri Jain, and other family members in the Delhi high court and a criminal complaint with the Delhi Police’s Economic Offences Wing.

Grover may lose his unvested shares and the right to call himself founder of BharatPe if the Singapore International Arbitration Centre (SIAC) rules in favour of BharatPe. Grover holds about 8.5% stake in the Delhi-based fintech unicorn. Of this, 1.4% is not vested.

The arbitration proceedings were initiated after Grover declined to comply with the shareholders’ agreement, one of the people cited above said.

The first hearing at SIAC is expected to happen within a week. In February, Mint first reported that Grover and Jain were charged with misappropriation of funds based on preliminary findings of an Alvarez and Marsal report that was submitted to the BharatPe board in January.

The investigations, which led to the board of BharatPe terminating the services of Grover and his wife, found irregularities related to vendor payments and recruitment fraud.

In February, Mint first reported that Grover filed an arbitration with SIAC, claiming that BharatPe’s investigations against him were illegal. He lost the arbitration at SIAC, and days after the ruling, Grover was sacked from all posts at BharatPe.

Mint was the first to report in March that Grover may forfeit unvested stock options equivalent to around 1.4% of his shareholding if the PwC investigation report finds evidence of misconduct against him.

According to the articles of association (AoA) of the fintech unicorn, 75% of the shares allotted to Grover after the series C funding in September 2019 were restricted. These shares were to vest over a period of three years on a pro-rata basis, with the vesting period ending in September.

BharatPe had earlier sent a notice to Grover, urging him to transfer the unvested shares.

“Ashneer has not signed the papers yet and he is still using ‘founder’ tag everywhere, which he can’t use. So, going for arbitration was the only option left," the person added.

Shardul Amarchand Mangaldas is representing BharatPe at SIAC.

A spokesperson for BharatPe declined to comment. Grover did not immediately respond to a request for comment.

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Arti Singh
Arti Singh has been a business journalist for 15 years. Over the last five years, she has closely tracked India's fintech space and written important deep-dive stores. As deputy editor, she covers the intersection of finance and tech at Mint.
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Updated: 09 Dec 2022, 10:30 PM IST
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