Bharat Co-Founder and director Ashneer Grover has lost an arbitration he requested to stop the company’s investigation against him.
New Delhi: Bharat co-founder and managing director Ashneer Grover has lost an arbitration he had requested to stop the company’s investigation against him. According to sources, the outcome was an emergency arbitrator ruling that there was no reason to block the review of governance within the fintech company.
Mr. Grover, who had last month was on a two-month absence of absence due to accusations of inappropriate language towards Kotak Mahindra Bank staff and fraudulent practices, has made an arbitration plea to the Singapore International Arbitration Centre (SIAC) asserting that the investigation conducted by the bank against him was unlawful.
An emergency arbitrator (EA) has but rejected all five grounds in his appeal and refused to grant one relief that is directly informed of the developments reported.
Although BharatPe declined to comment because the matter is pending, Grover could not be immediately available to provide comments.
Mr. Grover was arguing before his arbitrator that the initial investigation was not valid due to the violation of the shareholder agreement and the articles of association. He also claimed that the company is not authorized to investigate this.
He had dismissed an appointment for an external audit of the internal processes and systems as violating the law.
He had complained that people on the panel responsible for reviewing the governance process, including CEO Suhail Sameer and the company’s general counsel Sumeet Singh, seemed to be biased.
Additionally, “the appointment of Suhail Sameer as a director is to be removed from the company, and he is prohibited from performing any of the duties as director for the business,” Mr. Grover stated in his plea that also requested not to take any action against him.
Co-Founder Sources have said EA denied all five relief grounds.
Concerning the claims of bias based on bias, the EA claimed that Grover’s assertion wasn’t believable or plausible, as up to the last week, both Mr. Suhail and Mr. Sumeet were among the top employees and had everything great about them.
Furthermore, everything the company has done is legal rules of law and governance. The EA stated that there is no reason to make any changes that are not in compliance, saying outrightly that it rejects any claims and denies assistance to Grover
Sources told that Mr. Grover could contest the arbitrator’s decision in the Delhi High Court.
In his plea, Mr. Grover claimed that, despite numerous complaints and representations, BharatPe deliberately kept the review and evaluation by the review committee a secret procedure and denied him an opportunity to argue his argument.
According to sources, the first hearing in the arbitration was held on February 20, and the EA issued the ruling just a few days later.
Mr. Grover was advised by Karanjawala & Co, while BharatPe was represented by the senior attorney Abhishek Singhvi.
In his statements from this month, Mr. Grover demanded the removal of Mr. Sameer. However, removing the CEO from his position as the director requires approval from BharatPe founder Shashvat Nakrani
In addition, Mr. Grover requested that the current review panel should be disbanded, and a new “lawful committee was to be established to complete an exhaustive review of the activities of Bharat.
An internal investigation that has been conducted so far has identified the scope of the financial fraud at more than 50 crores. Bharat has hired a law firm and a risk advisory consultant to conduct an in-depth investigation following reports of economic irregularities, sources told.
PricewaterhouseCoopers (PwC), alongside Alvarez & Marsal (A&M), is doing the audit. The audit revealed alleged fraud through Madhuri Jain, the head of control at BharatPe and the wife of Mr. Grover.
Since the beginning of the company, Ms. Jain was the head of the departments of finance, procurement, and human resources and was fired after the review.
Changes in the company’s controversy-plagued founder are taking place at BharatPe since the release of an audio clip clip in which BharatPe’s founder, Mr. Grover, is threatening employees of Kotak Wealth Management over his inability to obtain financing for the initial share sale of Nykaa. On January 19 and 19, Mr. Grover was placed on an absence voluntarily for two months until March-end.