OPEN APP
Home / Companies / Start-ups /  What Ashneer Grover stands to lose with BharatPe exit

MUMBAI : BharatPe co-founder Ashneer Grover may forfeit unvested stock options equivalent to around 1.4% of his shareholding if the PwC investigation report tabled at a board meeting on Tuesday finds evidence of misconduct against him, a person aware of the development said.

According to the Articles of Association (AoA) of the fintech unicorn, 75% of the shares allotted to him after the series C funding in September 2019 were restricted.

These shares were due to vest over three years on a pro-rata basis, ending in September.

Restricted stock units are granted to employees and are subject to a vesting schedule and can’t be transferred or sold unless the employee stays with the company for a specified period. Grover resigned as managing director of BharatPe early Tuesday. Grover’s restricted shares from March to September are yet to vest, the person said, requesting anonymity. On Tuesday, Grover told the Moneycontrol website that he owns 8.5% in BharatPe.

Given Grover’s status as a founder-shareholder, the vesting of the shares will be determined by the shareholders’ agreement and whether or not the board finds cause to take legal action against him.

Grover may stand to lose 1.4% of his total equity if the PwC report indicates wrongdoing on his part or finds ‘cause’, the person said. The BharatPe board was deliberating the PwC report late Tuesday evening, and the company did not respond to a request for comment on the contents.

However, BharatPe’s AoA specifies that the board can oust a co-founder for a ‘cause’ only after a probe conducted by one of the Big Four accountancy firms, Mint reported. BharatPe’s board hired PwC last month as it widened the probe into several corporate governance lapses in the company.

Grover’s resignation around midnight of 28 February will in no way materially change the board’s ability to take legal action based on the PwC report, the person said.

After his resignation, Grover accused executives of Sequoia Capital and Ribbit Capital of being “far removed from reality" and treating founders as “slaves".

“The fundamental fact is that all of you as investors are so far removed from reality that you’ve forgotten what real businesses look like. Your outlook towards BharatPe has been limited to the small window on your Zoom meetings application, far removed from the sweat of the brow that goes into making BharatPe the business leader that it is. None of you, including the ones based in India, have ever been to our office even once since the pandemic turned our lives upside down and sought to suffocate the economy. Not even once. Not Micky. Not Harshjit. Not Mohit. Not Teru San. Not Rahul. Not Deven. No one. None of you even turned up despite an invitation to the inauguration of our new office. This is how connected you are to BharatPe," Grover’s resignation letter to the board said. He was referring to Micky Malka of Ribbit Capital, Harshjit Sethi of Sequoia Capital, Teruhide Sato of Beenext, and Rahul Kishore of Coatue.

The investors did not respond to queries seeking comment. Grover and a spokesperson for BharatPe also did not respond to similar requests.

However, a BharatPe investor said that relationships with startup founders are healthy and strong.

“The startup ecosystem in India is flourishing because it is very healthy and has strong investor relationships. What’s happening in BharatPe is an isolated case. It cannot be seen as reflective of the entire ecosystem. It’s sad that core issues are being deflected to serve a narrative that is totally false and agenda-driven," the person said.

Grover also accused BharatPe chairman Rajnish Kumar of holding company stock options and for not being “independent".

The person cited above said no law prohibits non-executive directors from owning Esops.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Close
Recommended For You
×
Edit Profile
Get alerts on WhatsApp
Set Preferences My ReadsFeedbackRedeem a Gift CardLogout