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regular-article-logo Monday, 23 December 2024

RBI lens on BharatPe governance

The affairs at the firm affects the depositors of the troubled co-operative bank PMC, which has forced the reported RBI intervention

Our Special Correspondent Mumbai Published 05.02.22, 02:51 AM
Ashneer Grover

Ashneer Grover File photo

Fintech leader BharatPe continues to be in a state of tumult with the Reserve Bank of India (RBI) reportedly looking into the possible violation of corporate governance rules in the firm.

reliminary investigations done by risk advisory firm Alvarez & Marshal (A&M) have revealed financial irregularities amid an apparent tussle between co-promoter Ashneer Grover and the BharatPe board.

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The affairs at BharatPe affects the depositors of the troubled co-operative bank PMC, which has forced the reported RBI intervention.

It is the joint venture of BharatPe and the Centrum group — Unity Small Finance Bank — which has taken over PMC Bank. The central bank is mandated to ensure that commercial banks maintain high corporate governance standards.

Last month, BharatPe announced the appointment of A&M to do an independent audit of its internal processes and systems.

The A&M probe is understood to have shown certain questionable practices at the start-up.

However, BharatPe has said in a statement that its board has not received any interim or final report from the consultant.

There are also reports of a tussle between co-founder Ashneer Grover and the company’s board with Grover sending a letter on February 2, seeking the removal of CEO Suhail Sameer.

In an interview with Moneycontrol, Grover called Sameer a puppet in the hands of the investors.

He accused Sameer of siding with the investors to remove him from office. Grover also alleged that there is a larger conspiracy at play behind ousting him and instituting a probe.

Grover is learnt to have cited his powers under BharatPe’s shareholders agreement and also a clause under articles of association (AoA) to withdraw his nomination of Sameer as a director.

Both Grover and co-founder Sashvat Nakrani had jointly nominated Sameer as a company director in 2020. This comes amid recent speculations of the BharatPe board preparing to fire Grover. However, last week the fintech denied that it has terminated the services of any employee.

Grover, who holds around 9.5 per cent in BharatPe, is also understood to have sought a valuation of Rs 4,000 crore for his holding if the investors want him to leave .
“We are deeply pained that the integrity of the BharatPe board or individual board members is being questioned time and again through misrepresented facts and baseless allegations. The board in all its actions has followed due process in the best interest of the company,” a spokesperson of BharaPe said.

“We would urge that the confidentiality and integrity of the governance review and board meetings is maintained by all. We request everyone, including the media, to show restraint and allow the governance review to take place in a thorough manner. The board is yet to receive any interim or final report of the review,’’ the spokesperson said.

Initial findings of A&M indicate some gaps in the recruitment, for which the fintech usually pays fees to consultants. In five sample cases, the employees confirmed the date of joining as mentioned in the vendor invoice.

However, they denied being recruited through the consultant.

The findings have reportedly alleged that the invoices raised by these consultancy firms had commonalties such as similar e-mail & physical address or same typeface, and that Madhuri Grover — wife of Ashneer — received the invoices and forwarded them to the accounts department.

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