BharatPe’s founder Koladiya sues Grover to reclaim shares
- Koladiya retained the largest stake at 42.5% when Ashneer Grover joined BharatPe
- BharatPe was incorporated in March 2018 by Koladiya and Shashvat Nakrani (who was then studying at IIT-Delhi) as co-founders
Bhavik Koladiya, the original founder of BharatPe, has filed a lawsuit against Ashneer Grover in the Delhi High Court.
Koladiya is taking legal action against BharatPe’s co-founder and former managing director Grover “to get back his shares from him.”
The matter has been listed before Justice Prateek Jalan in the Delhi High Court.
Koladiya and Grover's fight over shares was first reported by Mint last year.
As co-founders, Koladiya and Shashvat Nakrani (who was studying at IIT-Delhi at the time) established BharatPe in July 2017 and incorporated it in March 2018. Koladiya was the company’s face back then and was talking to investors for funding. Three months later in June 2018, Grover joined as the third co-founder.
When Grover joined, the shareholding structure then was: Grover got 32% equity, Nakrani held 25.5%, and Koladiya still remained the largest shareholder in the company with a 42.5% stake, as per Registrar of Companies filings.
However, six months later in December 2018 just before Sequoia came on board as an investor, Koladiya’s name went missing from the founders' list “owing to discomfort on the part of large institutional investors to have a person with a jail term in the US.”
[Koladiya went to the US in 2007 and was running a grocery store where he started accepting payments digitally without a license. This violated identity theft and mail fraud laws in the US, and he ended up getting arrested and jailed. After judicial proceedings that went on for 22 months, he was let go with a fine of $100 and deported back to India in 2015.]
And ever since then, Grover became the face of the company. While Koladiya continued to remain the tech backbone of BharatPe – but as a ‘consultant’.
However, the founders and other stakeholders reached an understanding to minimize Koladiya’s public involvement with the firm. The arrangement involved him transferring his stake to Grover, Nakrani, Nakrani’s father (also his erstwhile schoolteacher) and some angel investors.
At present, Koladiya has filed a lawsuit to get his shares back from Grover in the Delhi High Court. As of today, Grover holds shares worth over ₹1000 crore for Koladiya.
The defendants, in this case, include BharatPe as well.
BharatPe raised its last funding round in 2021 at a valuation of $2.85 billion.
The development comes seven months after Koladiya moved out of BharatPe. In August 2022, Mint was the first to report about Koladiya’s exit from the firm and the reasons behind his move.
Soon after the ‘ugly’ boardroom battle between Grover and BharatPe came to an end with the former’s exit, Koladiya was planning to take legal action against Grover to get back his shares from him. “The company’s investors also assured their support to Koladiya from the outside,” a source then told Mint.
“But just a week before he was to approach a Delhi court, Bhavik was asked not to pursue the case against Ashneer ‘because a settlement was being discussed’ with Grover – who was asked to leave the company over allegations of financial irregularities in February last year.”
One of the main reasons Koladiya ended his association with BharatPe was disagreements with the firm's management.
When Mint reached out to Koladiya for a comment, he said: “I cannot comment on this matter as it is sub-judice now. You can speak to my attorneys Sim & San.” BharatPe declined to comment, while Ashneer Grover did not respond to Mint's queries.
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First Published:17 Jan 2023, 11:55 PM IST
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