BharatPe Finds Itself Putting Out Fires Again As Boardroom Spat Turns Into A Keyboard Battle
BharatPe Finds Itself Putting Out Fires Again As Boardroom Spat Turns Into A Keyboard Battle
Since January 2022, BharatPe has witnessed boardroom turbulence unlike any other startup, and no other boardroom crisis has been as well-publicised and ionising.
People are taking sides on the internet, and Twitter fights can erupt at any time. Apart from the much-maligned Ashneer, no one else was fuelling the dumpster fire until yesterday, with Suhail Sameer occasionally prodding it to keep it going.
A full-fledged battle broke out yesterday in the comments area of a BharatPe employee’s LinkedIn page, and while Grover stayed out of it, his sister believed it was best to feed the flames even more. And Sameer reasoned that retaliating in kind would be a good idea.
This caused a firestorm, and while BharatPe’s staff has been working hard to put out fires, their (very immature) leaders have been lighting up anytime they get the chance; it’s impossible to spin this into something sensible.
So, what went wrong?
Late on Wednesday, a BharatPe employee, Karan Sarki, posted on LinkedIn about how staff had not received their paychecks and reimbursements, which had been due since December.
While LinkedIn has evolved into the next Facebook for professionals to express their interests, this appeared to be a genuine post by a distressed employee who was likely under pressure owing to overdue dues.
To raise his cause to the leadership’s attention, both current and former, the guy tagged them. He could not have predicted the amount of attention he would receive.
Ashneer was the first to respond to the impending fire, rushing to Karan’s rescue and pleading with the leadership, blaming Sameer and the BharatPe CA.
However, the comment section quickly devolved into a battleground, with Aashima Grover firing the first shot in response to Ashneer’s only comment on the post. In retrospect, Ashneer made the right decision by not responding to any comments and refraining from commenting on the post.
Surprisingly, the remark was quite supportive of Ashneer Grover and his ilk, with several support comments sprinkled among the post’s more than 250 comments.
Aashima, on the other hand, did not stop there. She continually responded to comments on the post, repeatedly chastising the BharatPe leadership, stating that the staff enjoyed themselves in Goa while the workforce suffered.
And she was proactive in shutting down any dissent, including claiming that media stories pointing to financial issues were bogus and that BharatPe was paying the media to do so. Aashima was ready to retaliate when Anushka here accused Ashneer and her wife of embezzlement.
For a refresher, the entire BharatPe saga was reported, from Ashneer’s leave until April 1, which has passed, to the infamous audio recording to his eventual stepping down from BharatPe after financial irregularities surfaced, which saw his wife and ex-BharatPe head of control Madhuri Jain Grover relieved of her duties.
While a full review isn’t necessary, the latest chapter in the BharatPe saga has unfolded in front of the entire globe once more. It reads like two teens arguing in a typical Facebook comments area.
People did not hesitate to bring up Ashneer’s time at SharkTank, claiming that it was a factor in his final resignation or dismissal, depending on who you ask.
Anyone claiming that Ashneer and his wife were in the wrong was promptly shut down by either Aashima’s supporters, who called the CEOs “destructive” and “heartless,” or by Aashima’s supporters, who completely denied everything.
However, everything came to a head quickly after Suhail made the questionable decision of entering the party and losing his temper, telling Aashima that Ashneer had taken everything and there was no money in the bank to pay the employees.
“Sister – your brother has stolen all of the money,” Suhail’s reply reads in romanised Hindi for those of us who can’t read it. There isn’t much money left to pay salaries.”
Aashima chose to respond to these criticisms in kind as well. This sparked a firestorm that no one at BharatPe could have predicted.
While the tide was already slanting towards BharatPe, Sameer’s remarks exacerbated the situation for them and the BharatPe team. However, he reassured Karan that if his settlement was not completed by Friday, he could contact him at his phone number.
The remainder of the comments is all over the place, with some even naming Prime Minister Modi in the article, reminding us why LinkedIn is the new Facebook.
Sameer had realised that nothing positive had ever come out of a brawl in the comments area, and he apologised for his remark in response to Aashima Grover at this point.
On the other hand, the other Grover continued to respond to comments and even hinted at a possible return, comparing Ashneer Grover to Steve Jobs. There are just a few parallels to be drawn here, and they all conclude with how the people around them see them.
Taking The Fight To The Streets
This brawl, which has since gone viral, is one step closer to completing BharatPe’s ideal disaster.
Suhail Sameer has not only made the case so well-known that it will be remembered for years, but he has also turned himself into a villain for no cause.
Aashima Grover is Ashneer Grover’s sister, however, she has no connection to BharatPe’s inner workings. Suhail should have realised this and avoided commenting or, for that matter, answering – there’s a reason a company the size of BharatPe engages PR firms. On the other hand, the current CEO tossed that out the window with a single remark.
Shortly after co-founder Ashneer Grover took a leave of absence from the company, the fintech unicorn hired Alvarez and Marsal (A&M), a risk advisory firm, to perform an independent audit of the startup’s internal procedures and systems.
Soon after, BharatPe hired PricewaterhouseCoopers (PwC), one of the Big Four accounting firms, to investigate the company’s transactions. Deloitte served as BharatPe’s statutory auditor, and it has likely been questioned about how it overlooked the alleged financial irregularities.
Amid the public spat, the Ministry of Corporate Affairs investigates crucial aspects of the fintech unicorn’s activities. According to The Morning Context, the ministry has urged BharatPe to give information on its operations. This comes following rumours that the MCA had begun investigating the BharatPe scandal.
According to reports, the central government agency is especially interested in how the company created its P2P lending business, known as the 12 per cent Club. According to reports, the company has disbursed INR 3,000 Cr ($401 Mn) in P2P loans and has also offered a total credit line of INR 1,000 Cr through the ‘Postpe’ buy-now-pay-later offering.
Employees are departing BharatPe in droves amid the probe, disillusioned by the leadership and the startup’s corporate governance difficulties. The entire meltdown of BharatPe is symptomatic of a more serious issue. The company’s failure to develop a safe atmosphere for its employees, on the other hand, has recently exacerbated its problems.
Street conflicts like the one between Aashima and Suhail affect no one except BharatPe, who now has to put out another fire while scorching his hands in the process.
BharatPe is a financial firm based in India that serves small merchants and Kirana store owners. Interoperable QR codes for UPI payments, Bharat Swipe (POS machine) for card acceptance, and small business financing are among the company’s fintech offerings.
It allows small businesses to take payments for free via the Unified Payments Interface (UPI) via BharatPe QR codes. It also offers merchant loans ranging from Rs. 7 lakh (US$9,200) to Rs. 7 lakh (US$9,200) for a period of 3 to 12 months. One of the other offerings is the 12 per cent Club, which is a peer-to-peer lending platform. In 2020, Bharat launched a new product, Digital Gold, allowing users to transact for 24-carat gold containing 99.5% purity.
In 2020, the firm debuted Digital Gold, a new product that allows customers to trade 24-carat gold with a purity of 99.5%.
Ashneer Grover and Sashvat Nakrani co-founded the company in 2018, and it is based in New Delhi, India.
BharatPe brand ambassadors include famous personalities like Rohit Sharma, Jasprit Bumrah, K. L. Rahul, Mohammed Shami, Ravindra Jadeja, Suresh Raina, Shreyas Iyer, Sanju Samson, Yuzvendra Chahal, and Shubman Gill. Mr Suhail Sameer was hired as the group president later in 2020.
The Reserve Bank of India gave Centrum Financial Services Limited in-principle approval to create a small financing bank with BharatPe in June 2021. It has expanded to 100 cities across India, including tier 2 and 3 cities such as Guwahati, Vellore, Hosur, Nagpur, Raipur, Bilaspur, Bhubaneswar, Pondicherry, Amritsar, Varanasi, and Agra, as well as tier 2 and 3 cities such as Bhubaneswar, Pondicherry, Amritsar, Varanasi, and Agra. It bought Payback India from American Express and ICICI Investments Strategic Fund in June 2021. It didn’t say how much the transaction cost.
Suhail Sameer, the company’s chief executive officer, was promoted from group president to CEO in August 2021, with Ashneer Grover taking over as managing director. Ashneer Grover resigned from the firm on March 1, 2022. The mudslinging between Grover and the company proceeded, with Bharat Pe management pointing to the founder’s extravagant lifestyle claims. The latest in the limelight was Grover’s expensive Porsche, which he purchased while pointing out business CEO Sameer Suhail’s BMW Z4.
BharatPe has competition, such as companies that are not entirely Indian because non-Indian companies own them, even though it calls itself Nationalistic because Indians wholly own it. Employees of the corporation circulated brochures containing similar information to smear competitors’ reputations. According to reports, the Mint has copies of such leaflets.
Competitors filed lawsuits and petitioned the Reserve Bank of India to stop BharatPe’s illegal actions. The Times of India also confirmed the booklet distribution. “BharatPe’s activities have enraged rivals, especially Paytm and PhonePe, as they compete more directly than others like Amazon and Google Pay,” according to the same report.
The other incident in which BharatPe was involved was with another competitor, PhonePe, which is a consumer-focused payments company that competes with BharatPe for merchant payments on UPI when the two payment apps argued over the usage of the word ‘Pe.’ In July 2021, the subject will be brought before the courts.
Controversies and Irregularities
Grover resigned abruptly from his post in January 2022, claiming his controversial behaviour in a meeting with a Kotak bank employee and on the reality TV show Shark Tank India. The Bharat Pe board then ordered an independent review of the company’s practices, including Grover and his wife Madhuri’s tenure as CEO. Following this, Alvarez and Marsal, a management consulting and risk advising firm, revealed financial irregularities such as payments of 53.25 crores to non-existent firms, resulting in a loss of 10.97 crores. Madhuri Jain, Grover’s wife, was also sacked from her position as Bharat Pe’s Head of Controls because of allegations of financial irregularities.
The business also cancelled her stock options. On March 1, 2022, Ashneer Grover resigned as Managing Director of the organisation. Meanwhile, Grover and his family have been charged by the corporation with misappropriating funds by Grover and his wife, Madhuri Jain Grover.
How BharatPe founder Ashneer Grover’s world crumbled?
The likes of Uber’s Travis Kalanick and WeWork’s Adam Neumann have a particular place in the annals of contentious startup entrepreneurs. Ashneer Grover may now join their ranks.
A furious schism has split the board of BharatPe, one of the country’s fastest-growing financial technology businesses, from Grover, the co-founder and former managing director. Grover has been accused of misappropriating cash by senior leadership in recent days. The workforce has detailed a broad list of grievances. A man who sounds like Grover threatens a bank staffer with murder in a leaked audio clip shared anonymously on Twitter for not helping him buy shares in a hot initial public offering.
Grover went on leave shortly after the tape surfaced online, though he denied on Twitter that the voice was his. In the days following, the 39-year-old has launched a full-fledged attack on the firm he helped build, aiming to oust a hand-picked CEO and threatening to sue BharatPe’s board of directors.
Grover resigned from the startup this week, bringing the controversy to a close. “We maintain all rights to pursue legal action against him and his family,” BharatPe said in a statement. His name was removed from the webpage. According to the statement, Mr Grover is no longer an employee, a founder, or a director of the company due to his actions.
Grover claims the allegations against him originate from “personal enmity and low thinking,” including that he misappropriated corporate funds to maintain a lavish lifestyle. “The only thing luxurious about me is my objectives and my ability to realise them despite all odds via hard work and initiative,” he told Bloomberg.
Grover and his colleagues are in the midst of a tense battle at the apex of India’s startup boom, or potentially the beginning of the end. In recent years, hard-charging entrepreneurs have pushed into uncharted territory, including e-commerce, online tuition, and digital health services. Rather than being concerned about provocative behaviour or personnel issues, investors were focused on record-breaking initial public offerings and a surge of foreign capital streaming into India. At the same time, China created barriers around its economy.
This description of the BharatPe saga is based on interviews with over a dozen current and former BharatPe employees and other corporate insiders. It’s a case study of how India’s business culture is changing as a swarm of aspiring entrepreneurs vie for legitimacy — and money — in one of the world’s most promising industries.
Until recently, BharatPe was lionised in the pantheon of India’s up-and-coming businesses. Grover helped the New Delhi-based firm secure money from Sequoia Capital, Tiger Global Management, Ribbit Capital, Coatue Management, and Beenext. BharatPe has a market capitalisation of approximately $3 billion after only three years in operation.
In digital payments, the internet company outperformed older competitors such as Paytm and Walmart Inc.’s PhonePe. Grover was the company’s growth engine, a slick talker who could persuade Bollywood stars like Salman Khan to back the brand. He was a terrific marketer as a “shark” investor on the Indian version of Shark Tank, making public appearances in flamboyant jackets and throwing zingers at fresh-faced entrepreneurs.
Grover’s power appears to be waning now. Madhuri, a prominent official at BharatPe with the title “Head of Controls,” has departed the company. Despite weeks of mudslinging, Grover has been relatively quiet since the board announced his departure last week.
Grover stayed deafeningly silent on the matter. Madhuri Grover did not respond to an interview request. Requests for a response from Sequoia, Tiger Global, Beenext, and Coatue were not returned. Ribbit did not respond to a request for comment.
A Fundraising Whiz
Shashvat Nakrani, a dropout from the Indian Institute of Technology New Delhi, one of the country’s most respected colleges, established BharatPe in 2018.
After collaborating with Bhavik Koladiya, a commercial pilot, the two surveyed small companies in India to learn about the issues with digital payments. Grover was requested to join as a co-founder a few months into the project.
The men honed in on a lucrative business strategy that tapped into merchant transaction data and underwrote loans to store owners with a single click. BharatPe deducted loan payments on a daily basis, with a monthly interest rate of 2%.
Grover, a former investment banker, was an invaluable partner in the fundraising process, assisting in quickly acquiring $2 million from Sequoia and Beenext. “He knew exactly what investors needed,” claimed one of BharatPe’s early employees. “He had a knack for delivering.”
Madhuri Grover, Grover’s wife and a fashion designer, shaped the company, overseeing everything from recruiting to marketing costs. According to one executive, the husband-and-wife duo became so entrenched in BharatPe in a matter of months that Nakrani retreated to the outskirts of everyday operations.
BharatPe quickly raised the stakes. Grover also raised hundreds of millions of dollars in a short period of time and attracted high-profile investors. Several high-profile executives were already on board by mid-2021, when the company’s valuation exceeded $2.85 billion, including Suhail Sameer, who reported to Grover as group president and was eventually moved to the chief executive.
BharatPe had already lent 25 billion rupees through its partners in September 2021, with about 140 million monthly transactions. Almost 7.5 million retailers used the platform.
In a September interview with Bloomberg, Grover stated well before the company’s public implosion, “I’m hyper-paranoid.” “I’m continuously asking myself, ‘How can I protect my business from competitors?’ Which new goods will help you develop faster?’
Piles of Complaints
However, as BharatPe increased in popularity, symptoms of concern began to surface and pour into the eyes of its investors.
According to employees, problems began to emerge around 2020. At the time, India’s first coronavirus outbreak was wreaking havoc on the economy, shutting down companies and forcing the country’s 1.3 billion inhabitants to stay indoors.
BharatPe’s office remained open, as did the offices of other tech businesses that provide critical services like food and medical deliveries. One seasoned female executive who joined the company that year expressed surprise that masks were not required. Only about a quarter of the company’s 70 employees wore them. According to the executive, Grover chastised her for making Covid a point of contention and influencing personnel who asked not to be identified for fear of retaliation.
She said her employment was abruptly terminated just a few weeks into the job. According to the executive, a top leader referred to her as a “diversity recruit,” Another attributed her dismissal to her “emotional baggage.”
In a letter to Sequoia, Ribbit, and Beenext, the executive requested a fair hearing from BharatPe’s backers. Sequoia’s lawyers stated that they were not involved in day-to-day operations and that they had asked that the startup address her concerns. In response to Bloomberg’s inquiry, BharatPe stated that “corrective procedures were done based on the employee’s allegations.” We can’t say much more because of the situation’s sensitivity.”
According to more than ten current and former employees, Madhuri Grover was another source of annoyance for senior executives. Staff claimed she threatened a colleague with a pay cut for printing at work and chastised people for how much coffee they drank in the office. According to members of the marketing team, Madhuri had questions about minor matters such as the price of a television or motorcycle that would be given away as part of a merchant promotion.
Nakrani and Sameer approached Grover to discuss his wife’s management style, which some employees viewed as meddling. According to one source, they begged Grover to employ an experienced chief financial officer, but he turned down applicant after candidate. The position is still open.
The couple’s ostensibly lavish lifestyle clashed with office frugality, rubbing some employees the wrong way. They traded in their modest house for a rented penthouse and remodelled another high-end residence. Grover invested in a Porsche. According to staff, he informed many people at the company that he spent $130,000 on a dining room table.
Meanwhile, employees said Grover pushed them hard as the company grew. According to the employees, the sales team met ambitious targets by forcing loans on merchants who didn’t want credit. Small company owners bombarded BharatPe’s customer service and collections teams with complaints.
In a February interview with Moneycontrol, an Indian journal, Grover remarked, “If you want someone to develop a 6 billion dollar firm in less than four years and want everything to be great, including culture, sorry, just not going to happen.” “Doesn’t rapid growth come at a price?”
Grover’s world had begun to shatter by January.
The audio clip, which was shared on Twitter, quickly became popular within the country’s tech sector. In it, a voice that sounds like Grover chastises a Kotak Bank employee for failing to arrange cash to purchase Nykaa IPO shares, an Indian beauty supplies company that nearly doubled in value following its initial public offering. While the bank staff answers politely primarily questions, the tape is sprinkled with Hindi insults. Grover disputed the voice was his on Twitter. Later, that tweet was removed.
According to Krishnan Ganesh, who has invested in scores of firms, including online supermarket Bigbasket, which the Tata Group recently acquired, “once in a while, the crazy streak could place the founder in the extreme region.”
Grover’s behaviour then took a weird turn, according to coworkers. He gave the board and Bloomberg a dossier that linked Sameer, the CEO, to a slew of defamatory allegations. BharatPe has declined to comment on the allegations. Sameer could not be reached for comment.
Grover’s money handling was investigated by PricewaterhouseCoopers and Alvarez & Marsal, who investors hired. BharatPe’s board accused Grover, his family, and relatives of directors in early March of creating bogus suppliers to syphon revenue and abusing expense accounts “to enrich themselves and fund their luxurious lives.”
“I am appalled by the company’s statement’s personal nature, but not surprised,” Grover said to Bloomberg, adding that his fortune was earned in part from $12 million in shares he sold during previous funding rounds.
The public unwinding has enthralled investors all around India. Many people consider the story as a cautionary tale about what occurs when a gifted but unpredictable leader pursues money at all costs. Grover, on the other hand, has taken the blows in stride.
Last month, he said on LinkedIn, “Founder is a guy who has the nerve to raise money from someone and tell them I’m not here to dance to your tunes.” Hundreds of his followers praised the post’s audacity and loved it.
In India, though, fellow company founders were not so helpful.
“No offence, but you appear to have completely lost the plot,” said Shantanu Deshpande, a grooming goods firm’s founder and CEO of Bombay Shaving Company.
edited and proofread by nikita sharma