FIR against BharatPe co-founder Ashneer Grover, wife, and family for Rs.81 crore fraud

Was BharatPe being used to launder money? Or was it an innovative method to pay a select few?

May 11, 2023

Co-founder of BharatPe accused of fraud and embezzlement in Rs.81 cr police case involving his wife

The Economic Offences Wing of the Delhi Police has filed an FIR against former BharatPe co-founder Ashneer Grover, his wife Madhuri Jain Grover, and family members Deepak Gupta, Suresh Jain, and Shwetank Jain for an alleged Rs.81 crore fraud after a complaint by the fintech unicorn. The FIR (First Information Report) was filed under eight sections of the Indian Penal Code, including 406 which deals with criminal breach of trust, 420 (cheating and dishonesty), 467, and 468 (forgery), leading to 10 years to life imprisonment, if convicted.

BharatPe in the complaint alleged that Grover and his family caused damages of about Rs.81.3 crore through illegitimate payments to bogus human resource consultants, inflated and undue payments through passthrough vendors connected to the accused, sham transactions in input tax credit and payment of penalty to GST authorities, illegal payment to travel agencies, forged invoices by Madhuri Jain and destruction of evidence.

BharatPe welcomed the registration of FIR saying, “For the last 15 months, the company has been facing a vicious and malicious campaign run by Grover against the company, the board, and its employees”. “The registration of the FIR is a step in the right direction, which unearths various suspicious transactions made by the family for their personal pecuniary gains,” it said in a statement.

“We have full faith in our country’s judicial and law enforcement systems and are optimistic that this case will reach its logical conclusion. We will continue to extend all possible cooperation to the authorities,” it added.

In December 2022, BharatPe filed a criminal complaint against Grover and his family with the EOW of Delhi Police, alleging fraud of Rs.81.28 crore, criminal breach of trust, conspiracy, cheating, forgery, and destruction of evidence. The same month, it also filed a civil suit with the Delhi High Court against its former MD and co-founder Grover and his family, seeking up to Rs.88.67 crore in damages for alleged cheating and embezzlement of funds.

The suit, running into 2,800 pages, alleges that Grover, his wife Madhuri Jain, and other family members created fake bills, enlisted fictitious vendors to provide services to the company, and overcharged the company for recruitment. Madhuri Jain was the head of controls at BharatPe and was fired earlier in 2022 after a forensic audit revealed several irregularities. Subsequently, Ashneer Grover resigned as CEO in March 2022.

BharatPe, last year, hit the headlines when Grover was accused of using inappropriate language and threatening a Kotak Group employee for failing to secure an allotment and funding for the Nykaa IPO for himself and his wife Madhuri Jain Grover. After that, BharatPe appointed Alvarez and Marsal, Shardul Amarchand Mangaldas, and PwC to conduct a corporate governance review and determine whether Grover had committed willful misconduct. This led to the ouster of Jain and Grover from the company and its board in March.

On May 10, 2022, BharatPe said that after the detailed review, the company had decided to take steps against employees involved in misconduct and claw back Ashneer Grover’s restricted shares. BharatPe had filed an arbitration claim in Singapore to claw back restricted shares (1.4 percent) allotted to Grover and prevent him from using the title of a founder. In January this year, Koladiya sued Grover reclaiming the shares transferred in December 2018. Last month, the company’s co-founder Shashvat Nakrani sued Grover over “unpaid shares”.

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