The Delhi High Court asked the fintech major to submit the report of the audit conducted by Alvarez and Marsal (A&M)
Grover filed a perjury application against BharatPe cofounder Nakrani under Section 340 of the Code of Criminal Procedure, 1973
BharatPe has filed an INR 88.7 Cr defamation case against Ashneer, his wife Madhuri and other family members
The Delhi High Court (HC) on Monday (January 9) refused to award any immediate relief to BharatPe in the INR 88.7 Cr defamation case filed by the fintech major against its ex-MD and cofounder Ashneer Grover, his wife and former head of controls Madhuri Jain Grover, and other family members.
In its plea, BharatPe has also sought details of bank accounts and properties owned by Madhuri Jain Grover and Ashneer Grover. The court admitted the fintech’s application for the same and has asked Ashneer and Madhuri to respond to the same on Monday.
Responding to the application’s admission, the counsel for the Grovers told the court that unless there is a decree from the court, the Grovers are not legally bound to submit the bank statements or other details about the holdings.
The court also asked BharatPe to respond to the application from the Grovers seeking access to the audit reports conducted by the company.
On the other hand, Ashneer filed his response to the allegations, saying that the finance and legal teams at BharatPe were aware of every GST transaction that took place at the fintech startup. He also moved a perjury application against BharaPe cofounder Shashvat Nakrani.
Ashneer Grover filed the application under Section 340 of the Code of Criminal Procedure, 1973, which has provisions for perjury in court.
The Delhi HC asked if the fintech major was already aware of the GST payments highlighted in the lawsuit. It is prudent to mention that the Directorate General for GST Intelligence searched BharatPe premises in March 2022 for alleged tax evasion.
The court told BharatPe to give Madhuri and Ashneer access to their official email IDs so that Madhuri can respond to the company’s allegations. The court also asked all the parties to not make the ongoing case a social media trial and maintain the decorum of the court.
Ashneer and Madhuri are represented by Giriraj Subramanium and Shonak Sharma, while BharatPe is being represented by Rajiv Nayar.
Inc42 has reached out to BharatPe for a comment on the matter and the story will be updated as and when the company responds.
BharatPe’s Losses Add To The Woes
BharatPe had conducted several investigations in the aftermath of Grover’s exit, including audits by PwC and Alvarez & Marsal. In early 2022, A&M was reported to have allegedly found financial irregularities, which was said to be a major factor behind the exit of the Grovers from BharatPe.
The development comes as the fintech unicorn is looking at a leadership crisis following Suhail Sameer stepping down as chief executive last week. Its loss also grew to INR 5,594 Cr in FY22.
However, according to BharatPe, in its total loss, an amount of INR 4,782 Cr is attributable to “an extraordinary item pertaining to the loss in a change in fair value of compulsorily convertible preference shares”. Even so, its operating loss stood at INR 811 Cr, a 3X increase from INR 270 Cr in FY21.
BharatPe ousted Ashneer and Madhuri in early 2022, alleging financial misconduct and misappropriation of company funds. While Madhuri Jain was fired by the company in February, her husband Ashneer resigned in March 2022.
The court will next hear the matter on March 13.
BharatPe’s Offensive Against The Grovers
The fintech firm filed a 2,800-page civil suit in the Delhi High Court in December 2022 seeking INR 88.7 Cr in damages from the Grovers. The startup has also demanded disclosures relating to assets owned by the Grover couple and other family members.
Apart from the defamation suit, the fintech unicorn is also seeking a gag order against the Grovers, barring them from posting anything against the company on social media. It has also sought permission from the HC to approach media houses to remove material which is purportedly against the company.
However, Ashneer Grover has already published his version of the events that transpired at BharatPe between October 2021 and March 2022 in his memoir ‘Doglapan’.
BharatPe has also filed a criminal complaint against Grover and his family with the Economic Offences Wing (EoW) on 17 charges, including alleged criminal breach of trust, forgery, document fabrication, and embezzlement.
Further, the fintech unicorn has also reached out to the Singapore International Arbitration Centre (SIAC) to take back Grover’s 1.4% unvested equity.
On his part, Grover has alleged that BharatPe wrongfully ousted him from the startup he cofounded in 2018.
Correction Note | January 10, 2023; 11:20 am
- A previous version of the article had portions which had erroneously reported court proceedings and status of notices. We have since edited these portions and updated the story