Ashneer Grover resigned after receiving Board meet agenda on PwC probe

Ashneer Grover's 9.5% stake in the company might be clawed back as it is on the Board's agenda to deliberate on the issue in the meeting tonight.

Ashneer Grover, the embattled co-founder of financial technology (fintech) unicorn BharatPe, resigned as managing director (MD) and company’s board director on Monday. The company later said Grover’s resignation letter was received within minutes after a board meeting was called to deliberate on an audit report by accounting firm PwC.

“Grover resigned as MD and board director of BharatPe, minutes after receiving the agenda for the upcoming board meeting that included submission of the PwC report regarding his conduct and considering the actions based on it. The board reserves the right to take action, based on the report’s findings,” the company said.

A source close to the development said Grover currently has 9.5 per cent shareholding in the company. However, the board meeting, which started late Tuesday evening (as some directors are in the US), is expected to discuss the PwC forensic audit report, consider his resignation letter, and might also touch upon the possibility of clawing back his shares in accordance with the articles of association and shareholding agreement. However, the full review on governance and risk management is still ongoing. The board meeting, however, had not ended till the time of going to press.

“The agenda of the meeting was sent at 11.56 pm on Monday. What was the urgency to send the agenda at midnight? I have written my resignation over two days,” Grover told Business Standard.

“They can’t do anything with the shares since the shareholder agreement (SHA) does not allow them at all (to claw back shares),” he added.

Grover’s resignation has come days after a plea filed by him with the Singapore International Arbitration Centre was dismissed.  In his petition, the BharatPe co-founder had sought indemnity from the audit report and asked to render it invalid as it did not comply with the SHA.

Last month, BharatPe had appointed risk advisory firm Alvarez & Marsal and Big Four accounting firm PwC to probe alleged financial irregularities on Grover and his wife Madhuri Jain’s watch. Jain, who was head of controls at BharatPe, was fired by the fintech unicorn last week.

‘Master-slave’ relationship

In his resignation letter to the board, Grover has hit out at investors and board members of the company for allegedly vilifying his family and him.

Shedding light on his fraught relationship with the company’s investors, he wrote: “You treat us founders as slaves — pushing us to build multi-billion-dollar businesses and cutting us down at will. Investor-founder relations in India is one of master-slave. I am the rebel slave who must be hung by the tree, so none of the other slaves can dare to be like me ever again.”

“None of you, including the ones based in India, have ever been to our office even once since the pandemic turned our lives upside down and sought to suffocate the economy. Not even once. Not Micky. Not Harshjit. Not Mohit. Not Teru San. Not Rahul. Not Deven. No one. None of you even turned-up despite an invitation for the inauguration of our new office,” he added.

Grover was referring to Meyer ‘Micky’ Malka of Ribbit Capital, Harshjit Sethi of Sequoia Capital, Teruhide Sato of Beenext, Rahul Vijay Kishore of Coatue Management, and Deven Parekh of Insight Partners.

Ribbit Capital owns 11 per cent of shareholding in the company, Beenext holds 9.6 per cent, Sequoia Capital 19.6 per cent, and Coatue Management 12.4 per cent, according to the data from Tracxn. Insight Partners holds around 10 per cent of the company, according to media reports.