BharatPe, a fintech unicorn, has sought up to Rs 88 crore in damages from former managing director and co-founder Ashneer Grover's wife Madhuri Jain and other family members. The company alleges that the Grover family created fake bills, enlisted fictitious vendors to provide services to the company, and overcharged the company for recruitment.
In the case's first hearing today, the Delhi High Court issued a summons to the Grover family and asked them to respond to the company's charges within two weeks. The next hearing date has been set for January 9.
Meanwhile, the company has filed a criminal complaint against Grover and his family with the Economic Offences Wing (EOW) on 17 counts, including criminal breach of trust, forgery, document fabrication, and embezzlement.
“Right now, it is just a complaint and not an FIR. If the Grovers are found guilty they might face imprisonment of 10 years,” said a person in the know.
Jain was the head of controls at BharatPe and was fired earlier this year after a forensic audit revealed several irregularities. Subsequently, Ashneer Grover resigned as CEO following a public dispute with the board.
Senior Advocate Mukul Rohatgi, representing BharatPe, also requested that the court intervene to restrain Grover from continuing his 'vitriolic campaign' against the company on social media.
In the civil suit, the company sought Rs 83 crore for misappropriation of funds and Rs 5 crore for reputational damage caused by Grover's public statements.
“Once the Defendants occupied these key positions and roles, they treated the Plaintiff as their personal fiefdom. By willfully perpetuating the lack of internal governance policies in the Plaintiff company, they conducted its affairs for their personal benefit,” BharatPe alleged in its plea.
For instance, the company alleged that the Grovers created fake vendors and bills for enlisting recruitment services in order to hire employees who were in fact hired directly by the company. In court, Rohatgi mentioned a certain Mr Behl, who was directly hired for a salary of Rs 1 crore, but fake vendor bills were created to charge the company a 15 percent commission on the hiring.
In another instance, the Grovers arranged for a payment to be made to Golden Holidays, a vendor purportedly providing travel agency services, for a booking in Thailand. However, Golden Holidays did not provide any services. In addition, payment for the same bookings and dates had already been made by the company to another travel agency, which had provided the goods and services.
"The payment to Golden Holidays is evidently a double payment caused to be made by Defendant Nos. 1, 3 and 4 for the misappropriation of funds from the Plaintiff," the company said.
In addition to dubious transactions and fake vendors, the company claimed that Grover contributed nothing to the technology and concept of BharatPe. It said that his association with the company started in 2018 when he made a ‘paltry’ investment of Rs 31,920 for which 3,192 shares were allotted.
The company claims that Grovers brazenly misappropriated funds for personal expenses such as rent and utilities on their personal residence, payments for family members' air travel, and the purchase of home appliances such as two televisions and a refrigerator.
The four-year-old company has been embroiled in controversy since the beginning of the year, when founder Ashneer Grover was accused of using inappropriate language and threatening a Kotak Group employee for failing to secure an allotment and funding for the Nykaa IPO for himself and his wife Madhuri Jain Grover.
Grover and Madhuri Jain Grover were then ousted from the company over allegations of misappropriation of funds.
The company had appointed Alvarez and Marsal, Shardul Amarchand Mangaldas, and PwC to conduct a corporate governance review and determine whether Grover had committed willful misconduct.
On May 10, BharatPe said that after the detailed review, the company had decided to take steps against employees involved in misconduct and claw back Ashneer Grover's restricted shares.
The company joined the unicorn club in August 2021 after raising $370 million led by Tiger Global. The company appointed Rajnish Kumar as chairman later in October.
Kumar has also been dragged into the company's controversies, with Grover calling for his ouster along with CEO Suhail Sameer, who has led the company since Grover's exit.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
