Bengaluru, February 24

Even as BharatPe’s former head of controls Madhuri Jain claimed in a tweet that the ongoing governance review was an eyewash and that the company’s board had asked her to resign, sources in the company contradicted her claims.

. Sources at Bharatpe revealed to BusinessLine that Ashneer Grover, Jain’s reporting manager and co-founder and MD of BharatPe, had himself proposed in a meeting on January 19, that Jain would be resigning from the company, citing ‘personal reasons.’ 

In the minutes of meetings that took place on January 19, and the minutes of the meeting that include the above-mentioned proposal of Grover. On February 23, Jain tweeted a screenshot of WhatsApp conversation between Suhail Sameer, BharatPe CEO, and Grover from January 19, 2022 evening. In this WhatsApp chat, Sameer asked Ashneer Grover if he had received Jain’s resignation, to which, Grover replied that the board hadasked Jain not to resign. “I am surprised you did not speak with Kewal Handa (independent director) or Rajnish (Chairman) after the board meeting,” the message read.

Sameer added that he had spoken to Micky (Micky Malka, Managing Partner of Ribbit Capital), Harsh (Harshjit Sethi, MD of Sequoia India), all of whom wanted Jain to resign. Thereupon, Grover reiterated that he would go with what the board had told him, and the board could put things on email to prevent confusion. 

However, the minutes of the meeting showed that the board had decided that Madhuri Jain’s resignation should be dealt with by the management. “It is not the board’s prerogative to take a decision on the resignation, or even discuss the resignation of an employee. So they said, the management can take the process forward. The minutes of meetings were also shared with Ashneer Grover who did not raise any objections to it,” said a source close to the company, who spoke to BusinessLine on the condition of anonymity. 

Grover was the reporting manager of Jain till that point. In the same board meeting, he had also proposed that he would go on a voluntary leave of absence. 

“The whole thing is a conspiracy. Why did @mickymalka and @HarshjitSethi of @Sequoia_India seek my resignation on 19.1.22 (same day Ashneer went on voluntary leave)? The current review is clearly just an eyewash and means to an end. Why was @SuhailSameer14 taking instructions ?,” Jain said in her tweet. 

She added that Shardul Amarchand Mangaldas and Alvarez & Marsal (A&M) did not present a single document to her when she was called. “They did not present any proof for me to address. Where is the concept of natural justice? I have learnt of allegations from the media. A&M has till date not been able to explain how its report got leaked,” said Jain. 

Jain was terminated from BharatPe on February 22, because of the financial irregularities discovered by the company. As per the employee contract, the termination of an employee also results in him/her losing the equity in the company. The source noted that Jain was terminated because of fake invoices discovered by the company after Grover went on a voluntary leave of absence. Jain’s termination letter is said to feature examples of her using the company’s money for personal expenses, wellness and skin treatment, among other things. 

GST paid on fake invoices

On Thursday, February 24, Jain posted more screenshots of WhatsApp group conversations which apparently included BharatPe CEO Suhail Sameer and Sumeet Singh. The group was created to discuss the Directorate General of GST Intelligence (DCGI) search operation at BharatPe’s head office, which took place on October 21, 2021. This search was also mentioned in the Alvarez & Marsal (A&M) preliminary review report which surfaced in the media on February 4, 2022. However, BharatPe has denied receiving any interim or final release of the independent review done by A&M.

The group chat includes photos of the Panchnama related to DCGI search operation. The document noted that the Amin Kumar and other officers met Rajeev Ranjan, BharatPe’s Corporate Counsellor, at the company’s Malviya Nagar officer. On enquiring about the directors of the company, Ranjan had said that none of the directors were present at the office as they were all in Dubai, following which , the officers searched the office premises and asked for the documents related to the purchase of Resilient Innovations Pvt ltd (BharatPe’s registered entity). Further, Ranjan informed that that was the corporate office of BharatPe and it maintained all the documents in the soft copy. Thereafter, officers summoned authorised representatives of the company to appear at the DCGI office and produce relevant documents.

Along with these chats, Jain said in a tweet, “The leaked A&M report talked about GST. Why is the Board silent about it now? Is it because it has backfired on two of its favourites @SuhailSameer14 and @sumeetsingh29 who were actually handling it and now on the Governance Review committee ? @HarshjitSethi @Sequoia_India.”

In this WhatsApp chat, Sameer said that “the officials have left. KK made a few calls. Simran and Ranjan, will meet them again tomorrow and there is nothing alarming yet.” In response, Singh wrote that “he has a senior level contact in the same department (investigations). Joint Director Level.”

Responding to this, a source said, “there is irrefutable evidence of fraudulent practices at the company and Jain was the head of controls, she signed off on all of it. Moreover, Ashneer Grover signed off on ₹1.5 crore of penalty for GST. Because they knew that recruitment invoices had GST on it and officials came asking for the money because money was not deposited. To push it under the carpet, they paid the penalty to the GST officials. So, in effect, the company ended up paying both the GST and penalty on fake invoices.” 

On February 23, another source had told BusinessLine, that the company’s board had also decided to terminate the services of Ashneer Grover and initiate criminal proceedings against him. Further, the company will also not be offering any settlement to Grover. However, Grover speaking to the media had said he would leave the company only if his 9.5 per cent stake was brought out at a $6 billion valuation indicating a pay-out of ₹4,000 crore. 

Earlier on January 29, 2022, BharatPe’s board had announced that they are conducting an independent audit of the company’s internal processes and systems and had appointed Alvarez & Marsal to advise the board on its recommendations. The final report of the governance review is expected to come by next week or so. 

BharatPe and Sequoia India, did not comment on BusinessLine queries on this matter. Madhuri Jain and Ashneer Grover, too, did not respond to queries.

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