Indian Fintech Unicorn Sues Co-Founder for Misappropriation of Funds
(Bloomberg) — BharatPe, one of India’s leading fintech firms, launched legal proceedings against its co-founder and his wife for alleged embezzlement and misuse of company funds, in what could mark the first case of its kind in the country’s thriving startup ecosystem.
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The company sued Ashneer Grover and his wife, Madhuri Jain, for damages worth about 880 million rupees ($10.7 million), according to a civil suit filed Wednesday in the Delhi High Court, a copy of which was reviewed by Bloomberg News. BharatPe has also requested the court to restrain Grover from making disparaging public statements about the company.
Grover and Jain face an additional 17 criminal charges in a separate complaint filed by BharatPe with the Economic Offenses Wing of the Delhi Police. Grover faces 10 years in prison if convicted.
Apart from Grover and Jain, the complaint names Jain’s father, brother and brother-in-law, according to a copy seen by Bloomberg. They are accused of making “illegitimate” payments of 760 million rupees to bogus HR consultants, in addition to making inflated payments worth 62.3 million rupees.
The complaint flags potential embezzlement of 717.6 million rupees and “dishonest and illegal payments” to travel agencies. Jain is specifically accused of enriching himself through reimbursement of forged invoices and destruction of evidence.
Tensions between Grover and other executives at BharatPe, which is backed by global investors including Sequoia Capital and Tiger Global Management, reached a climax in March, when the 39-year-old entrepreneur was forced to step down. The company’s C-suite accused Grover of using funds to bankroll a lavish lifestyle, allegations he has vehemently denied.
Ashneer Grover, Madhuri Jain and their family members did not respond to emailed questions and text messages seeking comment on the cases against them. The Delhi High Court has given Ashneer Grover’s legal team two weeks to respond.
The public showdown between BharatPe and Grover has cast a cloud over India’s dynamic startup economy, where venture money has fueled the rise of an ambitious new class of millionaires eager to displace the old guard.
Grover, who co-founded BharatPe in 2018, helped transform the company into a unicorn, going toe-to-toe with older rivals such as Paytm and Walmart Inc.-owned PhonePe. The technology company found immense success in providing digital payment services across India.
He was also the driver of growth and a master marketer, making public appearances in smart jackets and getting the scoop on budding entrepreneurs as a ‘shark’ investor on the first Indian edition of Shark Tank. Grover has no roster spot for the upcoming sophomore season.
–With the assistance of Sankalp Phartiyal and Shruti Mahajan.
(Updates with details of appeal through out)
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