The first time I took note of the company BharatPe was when the company announced a hiring drive that was almost unheard of in India. The company was offering expensive bikes (read BMWs), iPads, international trips, and more to employees who would get selected. It seemed like India is finally moving toward an employee-focused economy. This made me curious about the business and the brand.
BharatPe was founded in the year 2018 by Ashneer Grover and Shashvat Nakrani. It came at a time when UPI was finally being adopted by Indians for daily transactions. However, the issue of interoperability created a gap between the payee and receiver. BharatPe proposed a solution by giving shop owners the freedom to accept payments from any UPI app for ‘free’. If you go to a shop these days, you’ll likely find a BharatPe logo in the centre of a universal QR code. That code will allow you to make payments via different UPI apps such as GPay, PhonePe, Paytm and more.
The audio clip that started it all
Late last year, an audio clip surfaced which was later found to be a conversation between the BharatPe co-founder Ashneer Grover and a Kotak Mahindra bank employee. The second person in that clip is believed to be Ashneer Grover. In the audio, he was heard abusing the bank employee for failing to get him a stake in Nykaa IPO despite being promised for it. Initially, Grover rejected the claims by saying that it was an attempt at extortion. Later, he deleted his tweet that made the claim.
This entire episode seems to be the turning point for Grover and his wife Madhuri Jain. Following the Kotak Mahindra episode, the media lens brought the company under scrutiny. Grover also joined a reality TV show called Shark Tank India. At the show, he made some crude remarks on contestants leading to flood of memes. The attention clearly didn’t help with the ongoing tension within the company.
On January 19, around two weeks after the audio clip surfaced, Ashneer Grover put out a letter announcing that he is going on leave. In his statement, he said, “I plan to take temporary leave of absence from BharatPe till March end. I will return on or before 1st April 2022.” He claimed that he is taking the leave to “rejuvenate and refresh” for the company’s next sprint of value creation. The timing of the leave made a lot of people suspicious about what is happening at BharatPe.
Around 10 days after Grover decided to go on leave, his wife Madhuri Jain Grover also went on leave. This also coincided with the commencement of an investigation and the internal audit. The company appointed Alvarez and Marshal, a management consultant and risk advisory firm to conduct the investigation. This was the first time we could see a rift between the board of the company and Grover.
Soon after the announcement was made, a few media outlets reported the initial findings of the investigations. While the final report was still to be filed, the initial investigation found inconsistencies with vendors and the recruitment process.
Here’s what the leaked investigation report said:
-BharatPe was routing money through HR consultant firms that were fake and also connected to each other. Many employees who were apparently recruited via these firms were also questioned. However, they denied any involvement of any consultant firm in the hiring process.
-The leaked investigation also highlighted some of the vendors the company was dealing with were completely fake and the values associated to these vendors were inflated. This was the second time when BharatPe was found to be faking vendors. The first time was in 2021 when the Directorate General of GST Intelligence (DGGI) found some non-existent vendors. The DGGI also conducted a search operation at the company’s headquarters in October. Later, the company agreed to pay the dues and penalties.
BharatPe Board’s first Public Statement about the controversy
On February 4, the BharatPe board released a statement. In the statement, the board said that it is “deeply pained” by the allegations made against the company and it also urged the media and other stakeholders to hold out for the final report.
On the same day, a report claimed that Ashneer Grover was also gearing up for conflict with the board. Grover allegedly hired a Delhi-based law firm Karanjawala & Co. to safeguard his over 9% stake in the company. Earlier, Grover was reportedly demanding around Rs 4000 crore. Later, it was also reported that Grover was looking to sell his stake before the final verdict of the study comes forward. A media report claimed that Grover was willing to settle for much less.
Recent Developments
Late last week, Madhuri Jain Grover questioned Alvarez and Marshal about the leaked findings of their initial investigations. She threatened the firm with a lawsuit as her name was revealed in the findings even before the final verdict was announced.
Following the entire fiasco, media reports suggested that top talent at the company is looking out. This claim was substantiated in a way after BharatPe CEO Sumail Sameer. He wrote a letter to the BharatPe employees assuring them that most rumours about the company were unsubstantiated. He also claimed that the company has enough funds to “tide the crisis”
The final verdict from the investigation is expected to be released in the coming months. The report might reveal the fate of the payments company and the “shark” Ashneer Grover.
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