Fintech unicorn BharatPe has initiated action against its former founder and MD Ashneer Grover to claw back his restricted shares as per the shareholders’ agreement.
In a statement the company said, it will take all steps to enforce its right under the law. BharatPe has also terminated the services of several employees in departments who were directly involved with the vendors found involved in malpractices. The company did not disclose the number of employees affected by this move. If required, the company will also be filing criminal cases against some of them for the “misconduct and act of cheating committed by them against the company.”
The company has blocked many vendors who were found involved in malpractices, such as incorrect or inflated invoices. It had already issued legal notices to these vendors to recover the amount and will be filing civil/criminal cases against them. BharatPe added that these vendors were also identified during the GST Enquiry.
These measures have been recommended by the BharatPe board after the completion of company’s governance review. In January 2022, the board of BharatPe initiated the corporate governance review of the company.
Governance review
The company appointed Alvarez & Marsal (A&M), a global professional services firm, and Shardul Amarchand Mangaldas & Co. (SAM), a law firm, to help the board and management with its governance review along with PwC, a consulting firm, to determine wilful misconduct and gross negligence by a former founder (Ashneer Grover).
The review has identified a set of measures to strengthen internal processes and controls. These include implementing a new code of conduct, which will apply to senior management and employees. The code of conduct deals with the conflict of interest and other issues that can help to strengthen overall governance in the company.
Vendor Procurement Policy
Further, a new and comprehensive Vendor Procurement Policy has been developed, to help the company mitigate any risk of employees indulging in suspicious transactions to enrich themselves. The company will do internal audits regularly. Mazars India, a global audit firm, has been appointed by the company as an internal auditor. A new IT infrastructure management policy is also set in place now.
In addition to this, a full-time CHRO (Chief Human Resource Officer) and an interim CFO (Chief Financial Officer) have joined the company. The company is alsofinalizing candidates for the CFO role, and expects to close it in the current quarter. BharatPe appointed Smriti Handa as its CHRO last month.
Business performance
BharatPe said it has registered the strongest quarter in its history (Q4, FY22). “We have registered 4x growth in our overall revenue over the same period last year. On a sequential-quarter basis, the growth has been 30 per cent, despite the third wave of Covid-19. Going forward, we are tracking well to break even on our merchant business and further strengthen our consumer business,” the company added.
In March 2022, the fintech firm alleged that the Grover family engaged in massive misappropriation of company funds, and BharatPe reserved all rights to take legal action against him and his family. BharatPe’s statement in March also noted that due to his misdeeds, Grover is no longer “an employee, a founder, or a director of the company.”