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Exclusive | RBI examining corporate governance angle in BharatPe-Ashneer Grover episode

If the regulator finds material violation of corporate governance standards at BharatPe, it could even stop the Unity SFB-PMC Bank merger, said Ashvin Parekh of Ashvin Parekh Advisory Services

February 04, 2022 / 05:28 PM IST
Ashneer Grover, co-founder and managing director, BharatPe

Ashneer Grover, co-founder and managing director, BharatPe

Banking regulator Reserve Bank of India (RBI) is sifting through the recent events that have unfolded at BharatPe, one of the joint venture partners of Unity Small Finance Bank, to examine if there were violations of corporate governance rules and whether those have a bearing on the criteria set for promoters of banks, said two people with direct knowledge of the matter.

Trouble at BharatPe, which along with Centrum Financial Services, promotes Unity SFB, began when an audio clip surfaced that purportedly had co-founder Ashneer Grover abusing a Kotak Mahindra employee, accusing the bank of declining to finance his personal investment in an IPO launched by beauty company Nyka.

Grover, 39, maintains that the clip is fake, but the controversy snowballed after he sought damages from Kotak Mahindra boss Uday Kotak. Kotak Mahindra Bank in turn said Grover used "foul" language to threaten its employees and reserved the right to take appropriate legal action against him.

Grover was subsequently asked to go on leave until mid-March by the BharatPe Board, which was followed by the exit of his wife Madhuri Jain Grover. There are alleged issues in the operational matters and instances of financial irregularities at BharatPe, according to a report submitted to BharatePe Board by Alvarez and Marsal, a risk advisory firm.