Home / Companies / People /  BharatPe likely to fire co-founder Ashneer Grover amid fraud concerns

The board of BharatPe has decided to terminate the services of Ashneer Grover, the company’s co-founder and managing director, two people familiar with the developments said.

The decision is based on a preliminary internal investigation that has thrown up indications of financial fraud, the people said, requesting anonymity. The company has engaged a law firm and a risk advisory consultant to conduct a more detailed investigation, the results of which are expected to take two months.

The company this week has also terminated the services of 15 employees, including Madhuri Jain, head of controls at BharatPe, who is married to Grover, one of the two people said. Jain helmed procurement, finance and human resources from the company’s early days. She is a graduate of the National Institute of Fashion Technology, and she was running a fashion boutique before joining BharatPe. “At times, the company did try to look at hiring a qualified CFO (chief financial officer), but Grover turned down that decision," the person said.

Also read: BharatPe's Ashneer Grover showers praises on Kotak Bank's Uday Kotak amid row

BharatPe denied the company had fired the employees.

“The board of BharatPe has not terminated the services of any employee at this stage. Reports suggesting any termination are baseless and untrue. The board remains committed to an independent and thorough audit process. No action has been taken or will be taken till the audit has been completed," the company said in a statement. “We again urge the media not to speculate in advance of the report and make a judgement based on uninformed sources."

Earlier, BharatPe chief executive Suhail Sameer also denied the developments and said Jain has not left the company.

“The Board of BharatPe is committed to the highest standard of corporate governance at the company and is doing an independent audit of the company’s internal processes and systems. BharatPe, through its legal firm, Shardul Amarchand, has appointed Alvarez and Marsal (A&M), a leading management consultant and risk advisory firm, to advise the board on its recommendations. The board strongly believes in protecting the interests of all stakeholders, including customers, employees and partners," the company said in a statement. It did not respond to specific queries about Jain’s departure and allegations of fraud.

Developments around its controversial founder have been snowballing at BharatPe ever since the emergence of an audio clip in which Grover is heard threatening an employee of Kotak Wealth Management over the failure to secure financing for Nykaa’s initial share sale.

On 19 January, Grover was sent on voluntary leave of absence for two months till March-end. “It was because the board wanted to investigate a few things during that time. A few days later, Ashneer was put on “mandatory" leave of absence," the person said. “He has been instructed to not speak with any BharatPe employees or investors."

“This is not because of the Kotak issue, where Ashneer still maintains to his colleagues and the board that the audio is fake. This is a bigger case of financial fraud for which Ashneer, his wife Madhuri and five others (relatives of the couple, all of whom were not employees) are being investigated."

A preliminary internal investigation has pegged the magnitude of the financial misconduct at double-digit crores, the person said.

Now questions are being asked about realty purchases made by Grover during 2021. “In the past year, Ashneer has bought two houses worth more than 20-30 crore each. It’s unclear how he could have funded such large purchases," a third person with knowledge of the internal discussions said.

Grover and Jain did not immediately respond to separate messages with detailed queries until filing the report.

The board has found indications of “premeditated" fraud and is awaiting more conclusive evidence before pursuing legal action. “Investors are in no mood to let this go, and they want to set an example out of this," the first person said, adding that legal action to claw back Grover’s equity in the company is also being evaluated.


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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