After Being Ousted From BharatPe, Ashneer Grover Plans To Start Another Business Without Any Investors
After Being Ousted From BharatPe, Ashneer Grover Plans To Start Another Business Without Any Investors
Ashneer Grover, co-founder and former MD of banking platform BharatPe, stated that he intends to launch his own business without investment.
Grover, who has been stripped of all business titles along with his wife Madhuri Jain Grover for alleged “gross theft of company finances” and utilising “company expense accounts” to “enrich themselves and fund their luxurious lives,” has vowed he will not return to investors.
He declared at the TiECon-2022 startup and entrepreneurial event in Chandigarh, “I wish to start my own firm with my own money and make it lucrative.”
“I do not want to approach the investors again,” Grover told a panellist, adding that his battle with BharatPe is a “badly waged corporate battle.”
Last month, Ashneer threatened legal action against BharatPe CEO Suhail Sameer and the board of directors and asked Chairman Rajnish Kumar to resign for his comments on LinkedIn about his sister Ashima Grover.
In a letter to the BharatPe Board, Ashneer stated that Sameer should be “immediately handed a show-cause notice for his disgusting public behaviour and soon put on a leave of absence to manage the company’s brand’s harm.”
The Ashneer-BharatPe saga and a few other events (the most recent being the Singapore-based fashion-tech business Zilingo) have brought corporate governance to the forefront of the Indian startup sector.
Sequoia Capital India has declared that it will continue to respond firmly when it encounters “willful misbehaviour or fraud” and will take strong action if necessary, following recent fraud claims at some of its portfolio businesses.
Sequoia Capital India has indicated that it will not tolerate proven misbehaviour.
BharatPe is an Indian financial services company that caters to small business entrepreneurs and Kirana store owners. The company’s fintech products include:
- Interoperable QR codes for UPI payments.
- Bharat Swipe for card acceptance.
- Small business funding.
It lets small enterprises to accept payments for free using BharatPe QR codes and the UPI. It also provides merchant loans of up to Rs. 7 lakh (US$9,200) for 3 to 12 months. Other offerings include the 12 per cent Club, a peer-to-peer financing platform. In 2020, the company debuted Digital Gold, a new product that allows users to trade 24-carat gold with a purity of 99.5 per cent.
The company was started in 2018 by Ashneer Grover and Sashvat Nakrani and is situated in New Delhi, India.
Cricketers Rohit Sharma, Jasprit Bumrah, K. L. Rahul, Mohammed Shami, Suresh Raina, Shreyas Iyer, Prithvi Shaw, Yuzvendra Chahal, and Shubman Gill are among the BharatPe brand ambassadors. Mr Suhail Sameer was hired as the group president later in 2020.
The RBI gave Centrum Financial Services Limited in-principle approval to create a small financing bank with BharatPe in June 2021. It has expanded its network to 100 cities across India, including tier two and three cities like Guwahati, Vellore, Hosur, Nagpur, Raipur, Bilaspur, Bhubaneswar, Pondicherry, Amritsar, Varanasi, and Agra. In June 2021, it purchased Payback India from American Express and ICICI Investments Strategic Fund. The amount of the transaction was not disclosed.
In August 2021, Suhail Sameer, the company’s CEO, was moved from group president to CEO, with Ashneer Grover taking over as managing director. On March 1, 2022, Ashneer Grover left the firm. Grover and the firm continued to throw mud, with Bharat Pe executives referring to Grover’s expensive lifestyle claims. The latest in the limelight was Grover’s expensive Porsche, which he purchased while pointing out firm CEO Sameer Suhail’s BMW Z4.
BharatPe has competitors such as companies that are not entirely Indian due to non-Indian ownership, although calling itself Nationalistic due to total Indian ownership. Employees of the corporation circulated brochures containing such information to harm competitors’ reputations. According to reports, the Mint has copies of such leaflets.
Competitors filed lawsuits and approached the Reserve Bank of India to curb BharatPe’s illegal actions. The Times of India also confirmed the pamphlet distribution. “BharatPe’s activities have enraged rivals, particularly Paytm and PhonePe, as they compete more directly than others like Amazon and Google Pay,” the same claimed.
The other instance in which BharatPe was involved was with PhonePe, a consumer-focused payments business that competes with BharatPe when the two payment applications fought over the use of the word ‘Pe.’ The issue will be placed before the courts in July 2021.
Controversies and irregularities
Grover abruptly resigned from his position in January 2022, citing his aggressive behaviour in his encounter with a Kotak bank employee and on the TV show Shark Tank India. The company board then demanded an independent audit of the company’s practices, including Grover and his wife Madhuri’s stint in management. Alvarez and Marsal, a management consulting and risk advisory firm, discovered financial irregularities, including payments of 53.25 crores to non-existent entities and a loss of 10.97 crores.
When financial problems were discovered, Grover’s wife, Madhuri Jain, was also fired from her job as Head of Controls at Bharat Pe. The business also cancelled her stock options. Ashneer Grover resigned from his role as managing director of the company on March 1, 2022. In the meantime, Grover and his wife, Madhuri Jain Grover, have been charged by the corporation with misappropriating monies.
About Ashneer Grover
Ashneer Grover is the former co-founder and MD of BharatPe which he co-founded in 2018 with Shashvat Nakrani and Bhavik Koladiya. As an investor, Grover has appeared on the reality TV show ‘Shark Tank India.
Life and education
Ashneer Grover was born in Delhi on June 14, 1982. In his family, his mother was a teacher, and his father was a CA. He received his primary education in the nation’s capital and went to the Indian Institute of Technology (IIT) Delhi for his B Tech in civil engineering.
From 2002-2003, he participated in a student abroad programme at INSA Lyon University in France, and in 2006, he received his MBA from the Indian Institute of Management (IIM) Ahmedabad.
He worked for several companies before founding BharatPe, including Kotak Investment Bank, Grofers, PC Jeweller Ltd, and American Express. Since its inception, Madhuri Jain Grover, Ashneer’s wife and a businesswoman, has been the head of control at BharatPe, overseeing the procurement and administration departments.
Ashneer Grover’s resignation as BharatPe MD
After reviewing the agenda for the next Board meeting, which included submission of the PWC report regarding his conduct and consideration of steps based on it, Ashneer Grover resigned as MD and board director. According to a statement released by Bharatpe, the board maintains the right to take action depending on the inquiry’s findings.
Grover resigned as CEO and a company’s board director on February 28, 2022. Grover tendered his resignation minutes after the agenda for the board meeting on the PwC audit report was distributed, according to the business.
Ashneer Grover resigned from BharatPe for what reason?
Ashneer and his family have been guilty of significant money laundering, and BharatPe will pursue them in court. Ashneer Grover resigned from BharatPe after being found guilty of misappropriating company cash, according to the business’s board of directors, establishing a new front in the battle between the two sides.
BharatPe’s Ashneer Grover has resigned. Grover’s job has been terminated, he is no longer a director or a founder, and the company intends to take legal action against him.
According to sources familiar with the situation, Grover will likely lose roughly 1.4 per cent of his total restricted shares. Grover refused to say what action it planned to take.
BharatPe said in a statement released after a longboard meeting that Mr Ashneer Grover gave yet another false account of events after being informed that some inquiry results would be given to the Board.
“We condemn his spinning lies, screaming unsubstantiated charges and threats,” the company said in response to Grover’s interviews in which he launched direct attacks against Rajnish Kumar and investors like Sequoia.
What is Ashneer Grover’s Status Now?
The former CEO of one of India’s newest companies says he will evaluate companies formed by founders who control the company 100 per cent.
“I am now inspired by guys like Turakhias (Bhavin) and Nitin (of Zerodha), who are brave and eager to develop firms with 100 per cent ownership.” It’s something I’m still working on. He stated, “I want to develop it myself and not let others control it.”
Grover’s wife was also fired as the head of controls at BharatPe, and Grover resigned. He referred to a two-page resignation letter in which he claimed he and his family had been the victims of a series of unfounded, targeted attacks.
Accusations that investors mistreat founders by treating them like slaves are among the critiques levelled in the letter. The message reads, “I am the rebel slave who must be hung from the tree so that no other slave will ever have the same purpose as mine.” “Entrepreneurs in India are treated as enslaved people. Investors force us to establish billion-dollar firms based on their whims, then chop us down when they want.”
Relationships between investors and founders are similar to those between a master and an enslaved person.
Grover filed an emergency arbitration petition challenging BharatPe’s governance review decision, but SIAC dismissed the complaint. “I am spending my time fighting a lengthy, the lonely war against my investors and management and losing my status as the face of Indian capitalism,” Grover stated in his resignation letter.
Regrettably, the management has lost sight of what really matters – BharatPe.”
Response to charges by Ashneer Grover
“I am outraged by the personal nature of their words, but I am not surprised by those,” Grover remarked when asked about the company’s sentiments. They are expressions of hatred, scepticism, and personal unhappiness. I need to remind the Board of $1 million in Series C, $2 million in Series D, and $8.5 million in Series E investors.”
A&M, Amarconda, and PWC have all been auditing people’s ‘luxury’ lifestyles. Who of them is also conducting audits in this area?
“The only thing that makes me extravagant is my ability to live out my fantasies,” he explained. Grover’s resignation letter informed the BharatPe Board of Directors that he had resigned as managing director and board member.
In reaction to their “vested interests,” the BharatPe Board “disbanded” Grover, Grier stated in a letter. He also described the current events as a “media-driven game of egos masquerading as good administration.” Grovers also claimed that using the “investor template” to deactivate a “unwanted” founder is a way of turning the founder become “the villain.”
Ashneer Grover and his family are found guilty of fraud by BharatPe; Grover responds.
According to BharatPe, an internal inquiry has found the former MD, Ashneer Grover and certain members of his family guilty of financial misconduct.
Grover commented on LinkedIn, stating he was shocked but not surprised by the personal nature of the statement. He explained, “It originates from a place of personal hatred and poor thinking.”
“Mr Grover is no longer an employee, a founder, or a director of the company due to his actions,” the $3 billion fintech firm said in a statement, adding that it has the right to pursue additional legal action.
Grover sent a scathing email to the fintech company’s board of directors the day before, telling them his impending resignation.
Madhuri Jain Grover, BharatPe’s Head of Controls and Ashneer’s wife, was fired last week.
Fraud To Fund His’ Lavish Lifestyle’: BharatPe
In light of recent concerns, BharatPe acknowledged that its board of directors had authorised a thorough examination of its internal controls.
“Well-respected and unbiased external advisors are leading this thorough assessment,” it added, referring to Alvarez & Marsal and PwC, who completed the preliminary and major investigations.
“The Grover family engaged in extensive misappropriation of company funds, including, but not limited to, creating fake vendors to syphon money away from the company’s expense account and grossly abusing firm’s expense accounts to enrich themselves and live their expensive lifestyles,” according to BharatPe.
Ashneer Grover responded to the charges by posting a photo of bedding on the floor. He added, “I get invited to friends’ homes with open hearts, where I have no qualms sleeping on the floor.”
“I’m also interested as to who among Amarchand, PWC, and A&M has begun conducting audits on one’s lifestyle’s ‘lavishness.’ My aspirations and ability to attain them against all odds via hard work and enterprise are the only things luxurious about me “In his article, he stated.
Grover reportedly delivered his resignation letter minutes after learning that the internal investigation’s incriminating findings would be presented to BharatPe’s board of directors.
“Mr Ashneer Grover swiftly shirked responsibility by sending an email to the Board offering his resignation and inventing another false narrative of the events to the public minutes after receiving notice that part of the results of the inquiry would be submitted to the Board,” it added.
“The appointment of an audit committee and the installation of other critical internal controls,” BharatPe added.
Grover and his family
According to Mint, Alvarez and Marsal’s independent investigation had already shown two instances of fraud. The first concerns anomalies in recruitment, while the second concerns are paying non-existent vendors.
According to the magazine, the company was hiring employees but paying a network of HR consultants who had nothing to do with the hiring and appeared to be tied to each other and Madhuri Jain Grover.
Madhuri Grover appeared to have received invoices from her brother Shwetank Jain directly on several occasions, which she sent to the accounts staff for payment.
According to reports, roughly Rs 51 crore was paid to 30 bogus suppliers throughout the probe.
According to the article, the corporation didn’t contest when caught by the Directorate General of GST Intelligence (DGGI) instead of paying close to Rs 11 crore in dues and penalties. Deepak Jagdishram Gupta, the company’s procurement manager and Madhuri’s brother-in-law, appears to have handled the situation.
In his resignation letter on Tuesday, Grover said, “Effective immediately, I resign as the MD of BharatPe. I also resign from the board of directors. I will remain the company’s single largest individual shareholder.”
“I write this with a heavy heart since I am being forced to leave a firm that I founded today. I declare that my company is now a fintech industry leader with my head held high.”
He claimed to be innocent, and a victim of BharatPe’s management’s false and targeted assaults.
“Unfortunately, since the start of 2022, I’ve been the target of false and targeted attacks on my family and me by a few individuals who are willing to hurt not only me and my reputation but also the reputation of the firm, which they claim to be protecting.”
Grover and his wife took a two-month sabbatical after an audio clip of him allegedly threatening and abusing a Kotak Mahindra Bank employee for failing to get shares during Nykaa’s IPO went viral.
At first, Grover termed it a “false recording by some scammer trying to extort monies” but eventually deleted his tweet. The bank stated it was considering legal action against him for using derogatory comments toward its employees.
Ashneer Grover is Using His Shark Tank to Get Through the BharatPe Scandal
The developing BharatPe issue involving Co-founder Ashneer Grover and the company’s board of directors has claimed yet another victim.
The fact that the scalp belongs to Madhuri Jain Grover, his wife and the company’s head of controls, indicates that the couple is likely nearing the finish of a long, arduous investigation that could backfire.
If it happens, it may escalate far more quickly than they anticipate. I’ll address the visual implications as well but bear with me.
You’re probably tired of hearing different interpretations of what the scandal is genuinely about. However, you’re still unsure whether Ashneer’s strategy as a company founder makes sense or is even viable in the long run.
A Unique and Aggressive Path
During this time, Ashneer has not been a wilting wallflower but has instead chosen a strange and almost unexplained aggressive path.
He has opted to ‘raise’ his public image and to work with audiences who are becoming less and less aware of the crisis as time passes. This step in image management may be described as “launchy.”
Remember, you first heard it here.
We can’t yet guess what he’s cooking up or whether it’ll be a ‘soonicorn.’ However, any practitioner with panache will see the signs.
Is this a technique for imaging that is appropriate? Is this something you’d suggest to other people? Those are the questions I’ll attempt to answer as well. However, the giant, gleaming, bouncing balloon that is being inflated in front of thousands of people is a distraction. You’d best be ready for this.
From my extensive experience working with founders and companies, I know that crises can appear out of nowhere and strike without warning. Of course, the cardinal commandment of crisis management is to be prepared with safeguards in place and in time.
The boutique Angel Funders and Private Equity firms that I advise on best practices for founders are shocked. This is unforgivable since, given the facts, they have no explanation.
The Advantage of Shark Tank
Ashneer intensified the situation, which began with a leaked harsh language confrontation with the Kotak Mahindra Bank. Going after Uday Kotak himself was never a good tactic in communications or banking.
But, even putting that nuanced caution aside, the type of business model that BharatPe was working on demanded that its creator is beyond suspicion and spotless in terms of his personal dealings. Founders in the Defi and FinTech areas are unsure if there is anything that sticks that might be considered rotten.
Ashneer has taken a Brave New World method in this predicament. He’s now addressing an entirely new group of people. The “Shark Tank” series is bringing him the attention that he can’t get anywhere else is a tremendous plus.
However, he has greatly enhanced his identity by utilising that platform. He’s decided to grow from it, and he’s now amassing a ragged band of supporters that will follow whatever he chooses to feed them. Be damned to ethics and noble ideas.
He’s a YouTube sensation, and he gets people with massive followings to interview him because his content is getting better and better.
He is attractive, intelligent, speaks in everyday language, and, most importantly, his Hindi is street-friendly. A winning combination. This provides him with a competitive advantage that nearly no other tech or financial entrepreneur can match.
These aren’t his regular target audiences. It’s unusual for someone in his place – and not the kind of money mob he’d prefer to be in, considering his line of work.
A High-Risk Foundation: Don’t Try This at Home
What is the new meaning of the Ashneer Grover brand? That may be a million-dollar inquiry (back when billions weren’t the most often used currency unit). There’s more, even if it’s broken and bruised.
Many people will probably think of Ashneer as an aggressive yet resourceful advisor right now. To startups, he’s like a poor man’s Chetan Bhagat. However, he has evolved into a wise advisor on practically everything, from drinking habits to sleeping positions to investments.
In most cases, establishing such a reputation would be a tremendous undertaking. It’s also not for someone who is self-conscious or even marginally self-conscious. Is this a route that others could take? one seriously doubts it. Not advised and deserving of the “do not do this at home” label.
My impression is that the unique positioning he has achieved is built on a high-risk base. He’s presumably trying to show that he hasn’t done anything wrong. But on social media, he’s not about to admit it.
He’s creating the image of a “bad lad” who is brazening it out. Remember, it only works until an investigation uncovers something difficult and potentially dangerous.
Impressive audiences are easy to find through various social media techniques, and Ashneer has tried practically everything. In the meanwhile, their audiences are fickle as well.
How long can you keep the interest of individuals who are entertained by your hot takes? How much longer will they put up with a bad boy swagger from a man who doesn’t seem to mind that his wife is now at the centre of the storm?
Of course, Ashneer and Madhuri might appeal to an already established young following. The second alternative is for her to build an entirely new image and go on a different path, such as being “the bad girl.” Both types of image creations have their supporters.
But what if the investigations indeed find actual wrongdoings?
My impression is that the audiences in India are yearning for something to believe in. Some of them may be dissatisfied. For the time being, it is a risk worth taking.
Right now, the duo doesn’t have a choice. After all, the advantages of being distracted are currently more than worth the day of reckoning.
edited and proofread by nikita sharma