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The slanging match between BharatPe’s former managing director and founder Ashneer Grover, chief executive Suhail Sameer, and the board, sapping employee morale and forcing many to scout for jobs does not seem to end.

The latest salvo was fired by Grover early on Friday when he shot a letter to the fintech startup’s board demanding that Sameer be immediately issued a show-cause notice and sent on leave of absence for a “blatantly defamatory" comment made about Grover’s sister Ashima Grover on social media. A copy of Grover’s letter has been seen by VCCircle.

On Thursday, a BharatPe employee alleged on Linkedin that he and some other employees had not been paid their salaries for March. Ashima Grover commented on the post, urging the fintech to pay the salaries, to which Sameer responded: “Aashima behen (sister) - tere bhai ne saara paisa chura liya (your brother stole all the money). Very little left to pay salaries." Ashneer Grover, in his letter, demanded an apology from Sameer, failing which he threatened to sue him for defamation.

BharatPe did not respond to queries on the letter but a spokesperson said: “BharatPe strongly denies any social media comments which suggest that the company has not paid salaries to its employees. All the employees of the company have been paid their March salary in full."

“Employees serving their notice period will receive their full and final settlement amount in due course according to company policy," the spokesperson said. Grover’s letter also called for the resignation of BharatPe chairman Rajnish Kumar.

Kumar offered “no comments" to queries on his resignation, claims of pending salaries, and action on Sameer.

Sameer did apologise on LinkedIn on Friday. “Friends, I apologise to have irked many of you. In hindsight, it was out of line. We are already working on past employees full and final being paid out. My comment was a reaction to a particular statement, not the post. But I accept the mistake. I request you to also have patience and refrain from building a story based on a false narrative," he said.

The continuing spat is dampening the morale of BharatPe’s employees, some of whom are actively looking for jobs. “With this spat going so public, it will be morale busting for employees and we can see the impact already with many making their profiles available on job boards," said Supaul Chanda, vice president of technology recruitment firm Experis (of Manpower Group). The recruitment firm got 30-plus resumes on Thursday while BharatPe’s senior management was fighting on LinkedIn.

A search firm head, who did not wish to be identified said salary delays of any kind, even if they are for former employees, add to jitters.

“The market is on a hiring curve for core tech professionals and they know that both within the company and outside in the sector, they will be in demand. Expect profiles of support staff to become active on job sites," the person said.

Ashneer Grover had to go on leave in January following allegations that he used abusive language against a Kotak Mahindra Bank staff and charges of fraudulent practices. He had accused Sameer of siding with the investors to remove him from office. Consequently, BharatPe sacked his wife Madhuri Jain, which was followed by Grover resigning. Grover was stripped of all titles and positions after a third-party audit alleged grave governance lapses under him.

Industry watchers, tired of the prolonged war of words, have stressed the need to set up a ‘war room board’ to tackle such fallouts.

“As an external observer, such practices show immature behaviour by the CEO, founder, their relatives and the company. This is unbecoming of a company aspiring for public listing. For any public market investor, the spat coming from the CEO and not just a former employee would be a huge red flag," said Shriram Subramanian, founder and managing director, InGovern Research Services Pvt. Ltd, a Bengaluru-based independent corporate governance research and advisory firm.

The board needs to roll up its sleeves on what is happening in the business and guide the company for course correction, said Amit Tandon, founder and managing director at Institutional Investor Advisory Services (IiAS), one of India’s largest proxy advisory firms. “It cannot see its role as a mere adviser to the management. Those days are over," he said.

“They need to decide if there are any changes required for the company’s business and growth prospects, if there is a need for fresh hands at the top and most importantly look at the company's culture. The board - and not just the chair needs to be collectively responsible—given there are different roles of its different committees including the risk and governance committee, the NRC and audit committee," explained Tandon.

At least two investors said there are larger issues of regulations, differential voting shares, minority investor protection, etc., which need to be explored in the ecosystem to resolve and avoid this scenario, which is not limited to BharatPe.

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