This fintech firm’s fight with its founder may end in a courtroom

BharatPe, a fintech unicorn backed by Tiger Global and Sequoia India, has been in the news lately for all the wrong reasons.

After a string of alleged boardroom tussles, claims of fraud, and badmouthing, it would be no surprise if the company’s board is headed towards a legal battle with one of its founders, Ashneer Grover.

Grover, who is on leave for two months, last week sent a letter to the board that sought the removal of the company’s CEO, Suhail Sameer, calling him an “investors’ puppet”. However, Shashvat Nakrani, BharatPe’s other founder, has backed Sameer.

This has created a deadlock between Grover and Nakrani. According to legal experts, company founders jointly have the right to appoint a CEO, and the CEO can be removed if all the founders decide to withdraw the person’s nomination from the board.

Grover is also seeking a whopping US$535 million payout to quit the company. According to an Economic Times report, the board is unlikely to accept Grover’s demand.

“In light of these situations, there is a high likelihood that this may lead to court litigation if the deadlock is not resolved,” Salman Waris, managing partner at TechLegis Advocates & Solicitors, an India-based law firm, told Tech in Asia.

Grover has already assembled a legal team to protect himself against a possible ouster from BharatPe. He has also begun talks to sell nearly 10% stake in the company.

“This is an indication of a cultural difference between how investors want things done and how the founder thought he could run the show,” notes a legal expert who did not want to be named.

An email that Tech in Asia sent to BharatPe did not elicit a response while calls made to Grover went unanswered.

Grover’s tumble from the top

Amid these controversies and questions about its corporate governance, BharatPe underwent an independent audit of its internal processes and systems.

The audit’s findings, which were leaked on Twitter, cast a shadow over Grover and his wife Madhuri Grover as they were linked to “fraudulent schemes,” according to a Livemint report.

The preliminary probe by auditing firm Alvarez and Marsal pointed to recruitment fraud and payment to non-existent members. But BharatPe stated that its board has yet to receive an interim or final report of the review.

See also: A Singapore startup said no to an investor. The investor sued, citing a breach of contract