BharatPe-Ashneer Grover Controversy: Ministry of Corporate Affairs Looking At Board's Conduct

According to a report, a government official has said that the ministry will conduct a preliminary probe to find out the facts

Ashneer Grover resigned from MD post with BharatPe last week. Image: Getty

New Delhi: The Ministry of Corporate Affairs (MCA) has decided to look at how the board of BharatPe acted during its fight with Ashneer Grover, former managing director and co-founder of the fintech firm.

According to a report by Business Today, a government official has told the publication that the MCA will conduct a preliminary probe to find out the facts which led to a high-voltage drama in the company.

Ashneer Grover resigned from his post at BharatPe last week after nearly two months of high drama where he locked horns with board members and key investors. The company removed him from all position and accused him and his family of extensive misappropriation of company funds.

According to reports, Grover and co-founder Shashvat Nakrani held some of third co-founder Bhavik Koladiya’s stake. BharatPe’s board has taken a view that the co-founders have to sort out the issue amongst themselves. 

However, Grover rubbished all questions and counter claims over his shareholding in the company and said that he holds around 9 per cent stake in BharatPe. He also came down heavily on board Chairman Rajnish Kumar, former SBI chairperson, alleging that Kumar is not an independent director.

The fintech firm had indicated that the board reserves the right to take action against Grover based on the findings of audit reports. In a statement, the firm said, “Ashneer Grover resigned as MD and board director of BharatPe minutes after receiving the agenda for upcoming board meeting that included submission of the PWC report regarding his conduct and considering actions based on it. The board reserves the right to take action based on the report’s findings.”

The board had appointed Alvarez to conduct a governance review of the firm, and PwC was also roped in to conduct an audit.

The boardroom battle started with a leaked audio clip allegedly featuring Grover hurling abuses at a Kotak Mahindra Bank employee for not getting them a preferred share allotment in Nykaa’s IPO. Grover responded to the leak with a legal notice, inviting a counter from the bank.

Earlier, BharatPe terminated the services of Grover’s wife, Madhuri Jain Grover, who was heading the controls at BharatPe, as the investigation found misappropriation of funds during her tenure in the company.