Shark Tank India Fame Ashneer Grover Might Get Fired On Fraud Charges
The Shark Tank India show has received a great response from the Indian audience. This can be ascertained from the fact that the show #SharkTank has been continuously trending on Twitter. While the CEO of Emcure Pharmaceuticals, Namita Thapar, has been trending for the memes on her, the co-founder of BharatPe has lately been at the receiving end of criticism, mainly due to his unapologetic and rude behaviour in Shark Tank India.
BharatPe’s board of members are scrutinising the company’s practices, and for the same, co-founder Ashneer Grover has been put on a leave of absence by his board. A few days after the incident, Ashneer’s wife, Madhuri Jain Grover, Head of Controls at the fintech, has also gone on leave. The sources, on the condition of anonymity, suggests that Ashneer and his wife’s leave of absence signify larger issues going on in the governance of BharatPe.
For the past few weeks, Mr Grover has been receiving social media backlash for his abusive language to a Kotak employee, the toxic culture at Bharatpe and his reckless behaviour in Shark Tank India. A person close to the development said: “This is not about a personal dispute or a legal notice to Uday Kotak anymore. The fact that his wife also has gone on leave shows the scope of the board’s investigation has widened. Ashneer’s return now looks increasingly difficult,”
There are reports that BharatPe’s board is set to undertake an all-encompassing review of business practices under Ashneer Grover. The review is a part of any independent audit being conducted by board members after reports of alleged impropriety.
What All Will Be Covered In The All-Encompassing Review?
A source close to the development revealed that the review would cover payments, allegations of related party transactions, inflated invoices, lending to merchants, the company’s acquisition of Payback India from the American Express and ICICI Investments Strategic Fund. On Saturday, the fintech firm confirmed that it has appointed Alvarez and Marsal advisory firm to conduct the audit. On Monday, during an interview to the Economic Times, Ashneer Grover said that he is happy to be a part of any investigation as long as it is fair and as per the Indian law.
In its statement, BharatPe said: “The board strongly believes in protecting interests of all stakeholders, including customers, employees and partners. We request the media not to speculate until audit findings have been completed,” “The board remains committed to an independent and thorough audit process. No action has been taken or will be taken till the audit has been completed,” it added.
Ashneer Grover Hires Legal Firm To Protect His Shareholding
There have been reports that Ashneer Grover has hired New Delhi-based law firm Karanjawala & Co to keep his interests and shareholding intact in BharatPe. The co-founder and managing director of BharatPe has resorted to legal aid to keep his 9% stake in the fintech company. A report in the Economic Times said: “He (Grover) has begun conversations with Karanjawala as of now and is exploring his legal options against a potential ouster from BharatPe,”
Why Is The Audit Being Done?
Ashneer Grover was caught in a soup of controversies after an audio clip of him abusing a Kotak Mahindra Bank employee emerged. In the audio clip, Ashneer can be heard bashing the manager for failing to get an allotment and finance for Nykaa’s IPO. Though Ashneer maintained that the audio clip was fake, he and his wife Madhuri Jain Grover sent a legal notice to MD & CEO of Kotak bank, Uday Kotak. Mr Grover sent the legal notice in response to the bank’s legal action against the two for the abusive call. In a preliminary investigation, multiple conflicts of interest have been found around Grover and financial payments in related-party transfers. Reportedly, the BoDs of BharatPe’s parent company, Resilient Innovations, have been emphasising that Ashneer Grover needs to leave the company over his recent actions and behaviour.
Can BharatPe’s Board Oust Ashneer Grover?
Well, there are company legalities that need to be studied to understand if the board has the power to eject Ashneer Grover out of BharatPe. However, the Resilient Innovations Pvt’s Articles of Association (AoA) states that the findings against a stakeholder could lead to their loss of shareholdings in BharatPe. Under certain conditions, the board can also buyback the restricted shares of a founder at a lower price than the market value. However, such a buyback would need the majority of BharatPe’s investors. The AoA says that a founder who has been involved in any of the defaults mentioned in the AoA will not be allowed to vote on such issues. Also, the AoA restricts the founders to transfer the restricted shares to anyone, except to a relative or a corporate body wholly owned by the founders.