Ashneer Grover, the founder of BharatPe, who took a “voluntary leave of absence” until the end of March after the abusive phone call controversy, is now again caught in the eye of the storm as allegations of financial fraud as surfaced against his wife and brother-in-law.
According to Live Mint, a risk advisory company Alvarez and Marsal (A&M) was hired by BharatPe to look into the alleged financial irregularities. The law firm had delivered its investigation report to the BharatPe board on January 24th. On the 30th of January, Mint reported that the board had decided to terminate Grover’s services based on the preliminary assessment, despite the fact that it had commissioned a complete inquiry.
The preliminary investigation by the law firm had highlighted that there are two key grounds for the claims of financial malfeasance. The first concerns anomalies in recruitment, while the second concerns paying non-existent vendors. Madhuri Grover, Ashneer Grover’s wife and her brother, Shwetank Jain are reportedly linked to both the financial wrongdoings.
Madhuri Grover had been serving as head of control at BharatPe since incorporation and headed procurement and admin departments.
The report by A&M, interestingly mentions a “Panipat connection,” with all of the vendors listed in the invoices generated as being from Panipat. Madhuri Jain is also from Panipat, according to the report.
The recruitment scam masterminded by the wife of Ashneer Grover
BharatPe used to pay HR consultants fees for employees that were hired through them. The company was recruiting employees but falsely paying a network of staffing companies that had nothing to do with the employment and appeared to be tied to each other as well as Madhuri Grover, according to the inquiry.
The invoices for fees paid to these consultants were examined by A&M. Employees validated the date on which they began working, as stated on the vendor invoice. They, on the other hand, denied being recruited by the alleged consultants or having any knowledge of them.
According to the investigation, Madhuri Jain, the wife of BharatPe founder Ashneer Grover, received at least three of these invoices and passed them to the company for payment. According to the study, Shwetank Jain, Jain’s brother, had prepared these invoices. These consultancy companies were mostly sole proprietorships.
Furthermore, the firms involved commonalities such as similar email addresses, physical addresses, formats, and bank branches and most importantly, they were all based in Panipat. The A&M report notes that Madhuri Grover is originally from Panipat.
The sum paid by BharatPe for undelivered services was estimated to be close to Rs 4 crores based on an analysis of just two of the vendors, as revealed in the report.
According to reports, BharatPe is also conducting a probe into alleged frauds by its founder Ashneer Grover who is on voluntary leave till April 1. Grover has meanwhile hired a legal firm and there could be a likelihood that he along with his wife (who was overseeing recruitment operations) may have to exit the firm.
The Grovers and BharatPe are yet to respond to the controversy.
BharatPe pays penalty to avoid being served show-cause notice
According to the investigation report, searches were conducted by the Directorate General of GST Intelligence (DGGI) at BharatPe’s head office in October 2021. DGGI had issued summons to the company’s authorised signatory to appear before the authority on November 1, 2021.
The summons required the company to present purchase invoices for various businesses as well as bank statements showing payments to these vendors.
The company informed the DGGI in writing that they were non-existent vendors and that BharatPe did not want the DGGI to issue a show-cause notice with a request to waive the notification.
The letter was, interestingly, signed by “Deepak Jagdishram Gupta”. The Alvarez and Marsal report says Gupta was responsible for procurements at the company and is Madhuri Grover’s brother-in-law.
According to the audit, the company lost Rs 10.97 crore due to fraudulent invoicing, whereas the total spending related to 30 suppliers was Rs 53.25 crore.
The company reversed the claimed input credit of Rs 9.54 crore and paid a penalty of ₹1.54 crores.
A&M recommended to the board that this requires deeper investigation as to why the company was dealing with ‘non-existent vendors’.
BharatPe founder Ashneer Grover and the abusive call controversy
It may be recalled that last month, BharatPe had released a statement in which it stated that Ashneer Grover had gone on a “voluntary leave of absence” till the end of March, which the company maintained was in the best interests of the company, employees and investors. It was then speculated that Grover’s leave of absence was linked to the audio clip of him abusing an employee of Kotak Mahindra Bank that had surfaced on social media platforms a couple of weeks ago.
On January 5, an anonymous person tweeted a link to a now-deleted audio clip from Soundcloud, an audio hosting platform. In the audio clip, a bank employee was heard trying to calm down the two customers over the call. The customers could be heard using abusive language. When the audio was made public, it was alleged that the bank employee was from Kotak Mahindra Bank and the customers were Ashneer Grover and his wife, Madhuri. The customers not only used alleged abusive language but also threatened the employee.
After the audio went viral on social media platforms, Grover had issued a statement on Twitter alleging it was fake audio. However, things had turned sideways when on January 9, Kotak Mahindra Bank issued a statement in the matter and said they were pursuing legal action against the couple over the abusive language they used during the conversation with their employee.
Interestingly, after his audio had gone viral, netizens had also widely discussed Grover’s alleged toxic culture at BharatPe and his caustic behaviour on the reality show Shark Tank India.
