BharatPe accuses Ashneer Grover family of siphoning off company funds


Table of Contents



Since the war of words between Ashneer Grover and BharatPe’s board began two months back, the company for the first time officially accused the embattled founder’s family and relatives of misappropriating funds on Wednesday.


“The Grover family and their relatives engaged in extensive misappropriation of company funds, including, but not limited to, creating fake vendors through which they siphoned money away from the company’s account and grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles,” said





With Grover having stepped down from the company’s board, the focus is now likely to shift to his 8.5 per cent shareholding in the financial technology unicorn. Earlier, he had demanded an exit payout of Rs 4,000 crore, valuing the company at $6 billion.


A source close to the development said the board of has noted the termination of employment of Grover as a consequence of his resignation from the post of managing director (MD), as well as director. However, as he resigned without the approval of the board and majority investors, consequences under the shareholder agreement (SHA) have now been triggered.


According to sources, the consequences based on the company’s various agreements might have the board buy restricted back shares from a founder — at a value lower than its fair market value — if there is a ‘cause’ event.


ALSO READ: Ashneer Grover resigned after receiving Board meet agenda on PwC probe


chart


Also if the founder resigns without the approval of the board, the agreements, say sources, permit the board with the consent of a majority to acquire the founders’ ‘restricted shares’ at a value lower than the fair market value. Also, with his resignation, all rights and obligations of the founder under the articles of association shall rescind or cease to apply.


Sources say that gross negligence or wilful misconduct by a founder, as determined by a Big Four firm, which does not have any relation to the company, allows the board through a simple majority to take a decision on such a ‘cause’ event, based on the report shared by the appointed Big Four firm after following the principles of natural justice, as incorporated in the agreements.


Grover resigned as MD and the company’s board director on Monday. The company later said Grover tendered his resignation within minutes after the agenda for the board meeting on the PwC audit report was distributed.


Although the board meeting happened on Tuesday night, the company has not disclosed the decisions taken — and whether a first information report will be filed based on the audit report.


After the company’s public allegations of financial misconduct on Wednesday, Grover said: “I am appalled at the personal nature of the company’s statement, but not surprised. It comes from a position of personal hatred and low thinking.”


“I would also like to learn who, among Cyril Amarchand Mangaldas, PwC, and Alvarez & Marsal, has started doing audits on the ‘lavishness’ of one’s lifestyle? The only thing lavish about me is my dreams and ability to achieve them against all odds through hard work and enterprise. I hope the board can get back to working soon. I, as a shareholder, am worried about the value destruction. I wish the company and the board speedy recovery,” he added.


Grover’s resignation came days after a plea filed by him with the Singapore International Arbitration Centre was dismissed. In his petition, the co-founder had sought indemnity from the audit report and asked to render it invalid as it did not comply with SHA.


“They can’t do anything with the shares since SHA does not allow them at all (to claw back shares),” Grover told Business Standard earlier this week.


Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor





Source link