Ashneer Grover: The battle for Ashneer Grover’s BharatPe shares begins

Bengaluru: BharatPe is seeking to reclaim co-founder Ashneer Grover’s restricted shares in the company, several people familiar with the developments have told ET, signaling an escalation in the ongoing showdown between the fintech company and its former chief executive.

Earlier on Wednesday, the Delhi-based company said Grover and his family members engaged in “significant embezzlement” and “siphoned money from company accounts”.

In a statement, BharatPe said he reserves the right “to take further legal action against (Grover) and his family”, marking an aggressive comeback a day after Grover – who abruptly resigned from the company and of its board of directors on March 1 at midnight – had accused the company’s investors of having “vilified” it.

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“While the Board has taken notice of Grover’s termination, due to his resignation without the proper approvals from the Company’s Board of Directors, (this) allows BharatPe to trigger the Articles of Incorporation,” said one of the people quoted above.

According to the AOA – a legal document containing rules for the internal management of a company – filed by BharatPe’s parent company, Resilient Innovations, with the Registrar of Companies (RoC) in September 2021, if a founder terminates his employment without board consent, the company will repurchase the shares at a lower fair market value.

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Grover currently holds an approximate 8.5% stake in BharatPe. Of this amount, 1.4% is unearned, according to the people cited above.

“…if a founder terminates his employment for reasons other than death or permanent disability, unless such termination has the approval of the board of directors and investors representing the majority threshold of investors , then, subject to compliance with applicable law… the restricted stock held by that founder will be redeemed by the company at the lower of FMV (fair market value) or the price paid by the relevant founder for the acquisition of such restricted stock,” the company’s AoA states.

These shares can also be transferred to an employee provident trust at a lower price or at the price paid by the relevant founder.

The company defines restricted stock as 75% of the founder’s stock after BharatPe’s Series C funding in 2019 and the follow-on shares issued upon the closing of the Series E funding.

In addition, Grover was also granted management stock options amounting to 0.5% of the established company valued at Rs 100 crore.

In an interaction with ET on March 1, Grover said he would lose management stock options worth Rs 100 crore, following his run-in with the board of directors. administration of the company.

Grover did not respond to ET’s questions about the stock retrieval Wednesday night.

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Have nothing to hide, ready to go public with my finances: Ashneer Grover

BharatPe refutes the accusations

In a strongly worded statement on Wednesday, BharatPe clarified that Grover was no longer an employee, founder or director of the company while stating that he “strongly opposed Grover telling lies and launching baseless allegations and threats”.

“The Grover family and those close to them have engaged in numerous embezzlements of company funds, including but not limited to creating fake vendors through which they embezzled money from the account of the business and grossly abused corporate expense accounts in order to enrich themselves and fund their lavish lifestyles,” Bharat Pe’s statement said.

In response, Grover – who has been embroiled in a two-month standoff with the board and management of the company he co-founded – said he was not “surprised” and that the statement came from a position of “personal hatred”. ‘.

“I am appalled by the personal nature of the company’s statement, but not surprised. It comes from a position of personal hatred and low thinking. The board needs to be reminded of $1 million of secondary stock that investors bought from me in Series C, $2.5 million in Series D, and $8.5 million in Series E” , he told ET.

He also asked for clarification on which independent agencies charged with investigating allegations of financial irregularities at the company were verifying “the lavishness of his lifestyle”.

“The only thing that makes me lavish are my dreams and my ability to achieve them come hell or high water through hard work and an entrepreneurial spirit. I hope the board can recover soon at work – as a shareholder, I am concerned about the value being created. I wish the company and the board a speedy recovery,” added Grover.

The sharp exchange comes following BharatPe’s board meeting on Tuesday night when it discussed the findings of the PricewaterhouseCoopers (PwC) audit report, multiple people with knowledge of it confirmed to ET.

“Board members obviously disagree with the allegations that Grover has publicly leveled against the company…They will seek to take appropriate action now as the matter has gotten out of hand,” said one. person aware of the discussion. “There is sufficient evidence that the money was ‘siphoned off’ from the business linking him and his family members to the act,” a second source said.

ETtech Exclusive: BharatPe Co-Founder Ashneer Grover Explains How He Was Pushed To Quit

In an exclusive interview with ETtech Editor-in-Chief Samidha Sharma, BharatPe co-founder Ashneer Grover talks about the circumstances that led to his resignation from the company. look

Alleges witch hunt

During an interaction with ET on March 1, Grover alleged that the whole matter was a witch hunt by Bharat Pe’s board and management to get him out of the company. “I ran processes, and it’s not a process, it’s a witch hunt. And now it’s up to me to no longer be part of this witch hunt. That a review of the governance magically becomes a case of ‘conflict of interest’ overnight,” he told ET.

BharatPe, controls manager and Grover’s wife, Madhuri Jain, was fired by the company on Feb. 22 for “embezzlement.” Jain had posted videos of parties at BharatPe’s office on microblogging site Twitter last week, taking a dig at managing director Suhail Sameer and group product manager Bhavik Koladiya. In a series of tweets, she also called BharatPe’s all-male board “chauvinistic”.

The moment of Grover’s resignation

Hours after Grover’s resignation letter was sent to board members at midnight on March 1, BharatPe said in a statement that he anticipated the findings of the investigation which were to be discussed at a meeting on Tuesday.

“Minutes after Ashneer Grover was advised that some of the survey results would be presented to the board, he quickly shirks his responsibility by sending an email to the board offering his resignation. and fabricating another false account of events to the public,” BharatPe said in his Wednesday statement.

In an interaction with ET on March 1, Grover said he had been preparing his resignation letter for three days. “I was clear that I would send it Monday night. BharatPe’s board anticipates what I do, not the other way around. The council agenda arrived at 11:54 p.m. last night, so what prevented the council from holding a meeting at such short notice,” he asked.

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