BharatPe Appoints Ex RBI Deputy Governor BP Kanungo As Independent Director

Fintech major BharatPe has appointed former Reserve Bank of India (RBI) deputy governor BP Kanungo and Zomato chairman Kaushik Dutta as independent directors to its board. 

The appointments have been made to strengthen corporate governance structures at the controversy-ridden fintech startup. 

In a statement, BharatPe said that Kanungo will work closely with the Board to build, what it called, a ‘high-quality profitable business.’ The startup further added that BharatPe will also leverage Dutta’s extensive experience in corporate governance to guide the firm going forward. 

The proceedings also saw Kewal Handa stepping down from the board, with the company saying that he will continue to support the management in an advisory capacity.

With the new appointments, the Board will now comprise of two executive directors, five non-executive directors including four investor nominees and two independent directors. 

While CEO Suhail Sameer and cofounder Shashvat Nakrani are the executive directors, former SBI chairman Rajnish Kumar serves as one of the non-executive directors and chairman of the board. 

In a statement, the fintech player also reiterated that it was preparing to list on public bourses in the next 2-3 years.

Racing to the announcement, CEO Sameer said, “…Their diverse experience and deep understanding of the industry and the regulatory landscape, will be a great asset for us at BharatPe as we continue to build products that disrupt the market.”

Chiming in, Rajnish Kumar added, “Earlier this year, we had put in place a robust governance framework and were in the process of identifying the right leaders who could join the Board in building BharatPe 2.0. The recent important appointments are driven by this very thought and we hope that the composition of (the) board, processes and compliances in place will lead to best governance practices in the industry.’

After joining RBI in 1982, Kanungo served a four-decade tenure at the central bank and looked after various departments including the department of information technology, department of government and bank accounts (DGBA), among others. He has also served as the chairman of the governing board of the Indian Institute of Bank Management Guwahati and currently also serves as the director of the RBI-backed Centre for Advanced Financial Research and Learning (CAFRAL).

With an experience of 25 years under his belt, Kaushik retired as a partner from the auditing firm PricewaterhouseCoopers and serves on the board of companies such as Zomato, Policybazaar, HCL Infosystems, among others. He is currently the cofounder of Thought Arbitrage Research Institute (TARI), an independent not-for-profit research think-tank that works in areas of corporate governance, public policy and sustainability.

Is the Ashneer Grover Saga Behind BharatPe?

The fintech major was hit by a major corporate tussle earlier this year which saw cofounder and then-managing director Ashneer Grover open a front against other executives of the company.

It all began after an audio call of Grover threatening and abusing a Kotak Mahindra Bank employee went viral. The issue barely made a dent in his position but the story continued to unravel and took the company by a storm. 

Subsequently, Grover had a tiff with BharatPe’s key investors and board members and attacked the company executives in full public view. Close on the heels of that, BharatPe alleged that Grover and his wife made payments to fake vendors and siphoned money from the startup. 

As the matter gathered steam, both sides took potshots at each other and attacked each other in public view. Later, in a coup, BharatPe’s head of controls Madhuri Jain Grover and her husband Ashneer Grover were ousted from the startup amid public mudslinging.

As the matter was swept under the rug, it emerged that a slew of key managerial personnel (KMPs) were leaving the fintech major in droves. Since May, founding member Satyam Nathani, CRO Nishit Sharma and head of institutional debt partnerships Chandrima Dhar have put in their papers. Counting Grover and Jain, the fintech player has seen the exodus of six members of top leadership including a cofounder this year alone.

Joining the bandwagon was cofounder Bhavik Koladiya who also left the startup to join Finix Partners as Managing Director last month.

On The Mend?

The startup now appears to be focused on its IPO which is slated 2-3 years down the line. The company has beefed up internal quality controls and appears to be strengthening its corporate governance structures to prepare for the listing. 

It also hired former SBI Card CFO Nalin Negi as its new chief financial officer (CFO) last month in preparation for the IPO. 

Amidst all the drama, BharatPe also appears to be on the path to recovery. Late last month, the company reported that it processed a record $20 Bn in annualised total payments value (TPV), up from $18.5 Bn in the first quarter of financial year 2022-23 (FY23).

The fintech major also facilitated more than INR 3,600 in loans in Q1 FY23. Of this, loans worth INR 1.3400 Cr were disbursed to 1.2 Lakh merchants in the quarter under review.

Currently, BharatPe serves 1 Cr merchants across 400 cities, with its point of sale (PoS) business processing payments north of $ 4 Bn annually. 

Backed by marquee names such as Tiger Global, Dragoneer, Steadfast Capital and Sequoia, BharatPe has raised more than $650 Mn in equity so far.