Ashneer Grover Resigns As Managing Director Of BharatPe

Ashneer Grover, the co-founder and managing director of payments firm BharatPe, has resigned from his executive position at the company.

"I write this with a heavy heart as today I am being forced to bid adieu to a company of which I am a founder," Grover said in his letter dated March 1, a copy of which has been reviewed by BloombergQuint.

Grover's resignation from BharatPe comes amid an independent corporate governance review at the payments firm, initiated by its board. Later in the day, the board of BharatPe is likely to receive the report of a review, a person in the know told BloombergQuint on condition of anonymity.

Grover had gone on voluntary leave from the company on Jan. 19, when he had said that he will be back on Apr 1. Events had spiraled after a recording of an alleged conversation between Grover and his Kotak Mahindra Bank relationship manager surfaced on social media in which the BharatPe executive is heard using inappropriate language.

The initial findings of the corporate governance review initiated thereafter questioned the way Madhuri Jain Grover, the former head of controls at BharatPe and Ashneer's wife, had conducted recruitment drives through third party entities. It had also raised questions about missing vendors the company worked with.

Earlier this month, BharatPe's board had terminated Madhuri Jain Grover's services, the company had said in a statement.

In his letter, Grover has alleged that he has been "embroiled in baseless targeted attacks" on him and his family by a few individuals.

"From being celebrated as the face of Indian entrepreneurship and an inspiration to the Indian youth to build their own businesses, I am now wasting myself fighting a long, lonely battle against my own investors and management," Grover said.

In a statement on Tuesday morning, a spokesperson for BharatPe said that Grover resigned minutes after receiving a copy of the agenda for a board meeting where his conduct would be discussed.

"Ashneer Grover resigned as managing director and board director of BharatPe minutes after receiving the agenda for upcoming board meeting that included submission of the PWC report regarding his conduct and considering actions based on it," the spokesperson said. "The board reserves the right to take action based on the report's findings."

Investors vs Founders

Grover alleges that the investors at BharatPe, who hold board positions, are far removed from reality and have no appreciation of the work it takes to run the company day in and out.

"Your outlook towards BharatPe has been limited to the small window on your Zoom Meetings application, far removed from the sweat of the brow that goes into making BharatPe the business leader that it is," Grover said.

He also alleged that none of the investors, including Mayar Malka of Ribbit Capital, Harshjit Sethi and Mohit Bhatnagar of Sequoia Capital, Beenext's Teru San, Rahul Kishore of Coatue Management and Deven Parekh of Insight Partners, have ever visited BharatPe's premises after Covid-19.

"None of you even turned-up despite an invitation for the inauguration of our new office. This is how connected you are to BharatPe," Grover said in his letter.

He further claimed that the investors are treating him as a "button" and that he has ceased to be human for them. "Today, you have chosen to believe gossip and rumours about me instead of having a frank conversation. You are so easily spooked because you have no touch with reality," Grover said.

The investors treat founders in India as "slaves", pushing them to build multi-billion dollar businesses and cutting them down at will, he said.

"The fact of the matter is that today you believe that I have served my utility and so incrementally I am just becoming a liability. And since the investor template to make an unwanted founder go away is to make them the villain of the piece, that's what you have gone ahead and done," Grover wrote in his letter.

Grover has further maintained that the board will not find a single act of impropriety against him, but also that he will not be participating in the governance review, which he dubbed as a "charade".

"Since you clearly believe you can run this Company better without me – I am leaving you with this challenge. Build incrementally even half of the value I created so far – I am leaving you with three times the funds I've utilized till date," Grover said.

Value Of Grover's Stake

The co-founder further said that while he is resigning as the managing director of the company, he will continue to remain the single largest shareholder of the company. Previously, Grover has claimed that his stake in the company is around 9.5%.

Under the articles of association of the company, the board can buy back a founder's stake at a nominal value, if an independent reivew establishes any impropriety.

In his letter, Grover has claimed that while BharatPe was valued at Rs 20,000 crore ($3 billion) after its latest fund raise, it is now worth Rs 40,000 crore ($6 billion). This would value Grover's stake in the company at around Rs 4,000 crore.