BharatPe board says yet to receive final report of internal probe

“We are deeply pained that the integrity of the BharatPe board or individual board members is being questioned time and again through misrepresented facts and baseless allegations,” the board said in a statement Friday evening. “The board in all its actions has followed due process in the best interest of the company. We would urge that confidentiality and integrity of the governance review and board meetings be maintained by all…”

The board is yet to receive any interim or final report of the review, the statement read.

The statement comes amid reports that Alvarez & Marsal
has found fraudulent transactions at BharatPe during a preliminary probe. Grover’s wife Madhuri Jain, who is head of controls at the fintech startup, is under the scanner as well.

The findings of the report dated January 24 said the company (BharatPe) pays recruitment fees to a number of ‘consultants’ on employees recruited through them. “In 5 sample cases, (while) the employees have confirmed their date of joining as slated in the vendor invoice. But they have denied being recruited or engaged through the stated consultant or any knowledge of them,” the report, which was reviewed by ET, stated..

The report mentions that Madhuri Jain received at least three of these invoices herself and forwarded it to the company for payments. The invoices were created by Shwetank Jain, Madhuri’s brother, the report added.

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These loopholes were also brought to the fore by an investigation undertaken by the Directorate General of GST Intelligence in October last year. Further, to correct its accounts post DGGI’s investigation, BharatPe reversed input credit of Rs 9.54 crore and additionally paid a penalty of Rs 1.54 crore, taking the total loss of dealing with non-existent vendors to Rs 10.97 crore.

Earlier on Friday, ET reported that Grover wrote to BharatPe’s board members on Feb. 2
seeking removal of current CEO Suhail Sameer. Sameer was hired by Grover in 2020 and made the chief executive in August last year. Grover had assumed the role of managing director around the same time.

Interestingly, this letter also includes consent of BharatPe’s other co-founder Shashvat Mansukhbhai Nakrani to remove Sameer from the board of directors. Both Nakrani and Grover jointly nominated Sameer as a director of the company on August 20, 2021.