Delhi court tells Ashneer Grover to not create third party rights on BharatPe shares

In its last funding round in August of last year, BharatPe was valued at $2.8 billion

The Delhi High Court has restrained former BharatPe managing director Ashneer Grover from creating any third party rights on around 16,110 shares (3.09 percent) of BharatPe in his possession. It was hearing a case against Grover filed by BharatPe founder Bhavik Koladiya, who seeks to reclaim his shares.

According to sources, Koladiya had signed an agreement to sell around 1611 shares (now 16,110 plus after 1:10 splitting by company) a few years ago at the price of Rs 5000 per share. However, Grover allegedly failed to pay the amount of Rs 88 lakh to him. As a result, Koladiya told the court that he should get his shares back.

Another source close to the developments said Grover's wife had given Rs 8 crore to Koladiya's wife, and the former has been seeking a return of the sum saying that it was a loan.

Koladiya's lawyers argued in court that there was no evidence that the respective wives were transacting on behalf of the BharatPe founders.

The court also observed that on the same day that the Rs 5,000 per share agreement was signed between Koladiya, another agreement was being contemplated at around Rs 33,000 per share.

In December, BharatPe had filed for arbitration at the Singapore International Arbitration Centre in order to claw back estranged co-founder Ashneer Grover's restricted shareholding (1.4 percent shareholding) in the company and right to use the founder title. The company has also urged that SIAC award Grover's unvested shares to BharatPe co-founder and board member Shashvat Nakrani for a cash consideration of Rs 33 lakh.

As such, Grover holds a roughly 8.5 percent stake in BharatPe, of which 1.4 percent was not vested and was released upon his resignation. Another 3.09 percent is now claimed by Koladiya. If both these claims against Grover go through, his shareholding in BharatPe will reduce by half to around 4 percent.

In its last funding round in August of last year, BharatPe was valued at $2.8 billion (approximately Rs 23,000 crore at current exchange rates).

Koladiya’s case is the fourth legal action against Grover in the last two months, following the SIAC petition, a civil suit in the Delhi High Court and a criminal complaint with the Economic Offences Wing.

In the civil suit, the company has 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.

In addition to dubious transactions and fake vendors, the company alleged in the lawsuit that Grover contributed nothing to the BharatPe technology or concept. It said that his association with the company began in 2018 when he made a  ‘paltry’ investment of Rs 31,920, for which he received 3,192 shares.

Since the beginning of 2022, the four-year-old company has been embroiled in controversy after its founder 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.

While Grover took a voluntary leave and later resigned as the company's MD, his wife, former head of controls Madhuri Jain, was fired over allegations of misappropriation of funds.

In February last year, the SIAC denied Grover's appeal to block an internal investigation on multiple grounds.