In a move that shook up the start-up world, fintech firm BharatPe has sacked Madhuri Jain Grover, the company’s controller and wife of the co-founder and MD, Ashneer Grover, over alleged “misappropriation of funds” during her tenure, the company spokesperson has confirmed to the media today (February 23).
Stock options vested with Madhuri have also been cancelled, they said adding the alleged financial irregularities have been detailed in the termination letter.
This move comes in the wake of preliminary findings emerging from an external audit that was commissioned by BharatPe board to look into the conduct of the Grovers.
Media reports quoting sources said Madhuri Jain Grover allegedly used company funds for personal beauty treatments, buying electronic items and family trips to the US and Dubai. She also allegedly paid her personal staff out of company accounts and produced fake invoices, reported news agency Press Trust of India, who quoted sources.
“We can confirm that services of Madhuri Jain Grover have been terminated in accordance with the terms of her employment agreement,” the spokesperson said. The spokesperson however did not elaborate on the reasons for the termination.
Jain has been in charge of finances at the company, valued at $2.8 billion, since October 2018. However, both Grover and Jain have been on leave from the start-up from mid-January.
Also read: BharatPe MD Grover opts for voluntary leave after spat with bank
BharatPe, which provides shop owners the facility to make digital payments through QR codes, has been embroiled in a controversy and facing heavy investor scrutiny after Ashneer Grover locked horns with Uday Kotak, the head of Kotak Mahindra Bank. Grover was upset after the bank reportedly backtracked on giving him ₹ 5 billion to invest in the IPO (Initial Public Offering) of online beauty products company Nykaa at the “eleventh hour”.
Allegations of Grover using abusive language against Kotak Mahindra staff surfaced and so did allegations of his fraudulent practices. Grover, who was sent on a three-month leave, has denied these allegations. In media interviews, he reportedly called the current CEO Suhail Sameer as an “investors’ puppet.”
Alvarez and Marsal, a leading management consultant and risk advisory firm, which was appointed to do a financial audit of the company, is all set to submit its report. Global audit firm PwC was also roped in to audit the functioning of the fintech company.
In a letter to the company’s employees, the newly-appointed BharatPe CEO Suhail Sameer highlighted some “serious allegations” based on internal complaints which are currently being reviewed. The employees must keep their faith in the Board, he added.
While many findings of the governance review were “pretty standard”, there were “a couple of more serious allegations”, he wrote, adding the review is still “substantiating the allegations”.
BharatPe which competes with apps such as SoftBank’s Paytm and Google Pay in the country’s booming payments market, and is hoping to file for IPO within 18 months. It serves over 75 lakh merchants across 150 cities and lists Tiger Global, Sequoia Capital and others as “marquee investors”.