GST body finds more instances of tax fraud at fintech firm BharatPe

The Directorate General of Goods and Services Tax Intelligence (DGGI) has found instances of fraud at BharatPe, and the tax probe body has recovered Rs 12.5 crore so far from the fintech firm, a person aware of the development said.
 
The fintech firm — at the centre of corporate governance lapses — has agreed to having issued more invoices to non-existent vendors, and has additionally deposited Rs 1.5 crore with the tax authorities. Earlier, BharatPe had agreed that the fintech firm had issued invoices to non-existent vendors, and deposited about Rs 11 crore to the tax department.
 
“There have been more instances of fraudulent invoices issued by the company to fake vendors, and DGGI is continuing with its investigation,” the person quoted above said.
 

The investigation body will continue seeking more data from the company, and look at instances of fraud as an external audit conducted by the company’s board suggested a deeper investigation in the firm’s dealing with fake vendors, the person added.
 
BharatPe did not respond to an email seeking its comments.
 
Bharatpe, In October 2021, had accepted it had issued invoices to non-existent vendors and paid about Rs 11 crore, in dues and penalty, to the tax department. The fintech firm’s board had conducted an audit of the company by Alvarez and Marsal which revealed BharatPe’s dealings with fake or non-existent vendors. The audit’s initial findings were based on DGGI’s probe that procurements were done by the company from non-existent vendors or those who did not operate at principal place of business. The fintech firm, through its representative, Deepak Gupta, brother-in-law of Madhuri Jain Grover, had agreed some of its vendors did not exist. Madhuri is the wife of BharatPe co-founder Ashneer Grover and was head of controls of the company. 
 
The audit found the Grover family and relatives were engaged “in extensive misappropriation of company funds, including, but not limited to, creating fake vendors through which they siphoned money away from the company's expense account and grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles.”
 
Both Ashneer and Madhuri Jain Grover have been fired by BharatPe.