BharatPe says it will claw back co-founder Ashneer Grover’s restricted shares and terminate services of several employees who engaged with sketchy vendors as the Tiger Global-backed fintech startup looks to recover from a strange and tremulous episode early this year.
The Noida-headquartered startup, last valued at $2.85 billion and which helps merchants accept money online and also provides them with working capital, earlier this year launched an investigation into its own co-founder Grover following complaints. It concluded that Grover and people close to him had “siphoned [off] money” and engaged in “extensive misappropriation of company funds.”
BharatPe said on Tuesday that based on the report by Alvarez & Marsal, Shardul Amarchand Mangaldas and PwC, the startup’s board has recommended several measures, including clawing back Grover’s restricted shares. The firm did not share how much of Grover’s restricted shares it plans to take away, but a source familiar with the matter said that shares of Grover, who starred in India’s version of Shark Tank as a “shark,” will be diluted down to 7.1%, from 8.5%.
The firm has also enforced a new code of conduct, which is applicable to both senior management and employees, that deals with conflict of interest and other issues, BharatPe said. It has also introduced a new vendor procurement policy to oversee and vet the vendors with whom the startup engages, as well as hired a full-time CHRO and an interim CFO.
Earlier this year, an alleged audio clip surfaced on Twitter of a man — presumed to be Ashneer — hurling abusive and life-threatening statements over a phone call to a Kotak Bank representative over not getting financing to buy shares in fashion e-commerce Nykaa’s IPO. The clip, which went viral on social media, triggered a chain of events that prompted the board to conduct an investigation.
Grover has denied any wrongdoing and in an early televised interview threatened to make public “dirt” on investors and board members if the startup continues to hurt his reputation. He said his investors are “removed from the reality” and treat founders as “slaves.” BharatPe termed his allegations as “baseless lies.” Grover resigned from the firm earlier this year.
The startup said it is also removing services of “several employees” in departments who were directly involved with blocked vendors. “If required, the company will be filing criminal cases against some of these employees for the misconduct and act of cheating committed by them against the company,” it said.
Meanwhile, Grover is working on a new startup, he said at a recent conference. One thing that he is very clear about for the new startup is that he won’t raise money from VCs, he has said.