3 months ago
Delhi’s EOW raises LoC against Ashneer Grover and spouse for ₹82 Crore fraud at BharatPe through fake HR firms.
Let’s see where & how it all began.
BharatPe co-founder Ashneer Grover and wife Madhuri Jain, formerly the Joint Director-HR at BharatPe and the family members Deepak Gupta, Suresh Jain, and Shwetank Jain, were stopped by the Delhi Police's Economic Offences Wing (EOW) at the Indira Gandhi International Airport while on the way to New York. The Delhi’s EOC has issued a lookout circular as a call for investigation to uncover the matters of fraud at BharatPe.
Why are they alleged of fraud?
Recruitment firms linked to BharatPe co-founder Ashneer Grover and the family used backdated invoices to siphon off funds from their own company.
The allegations are faced by Ashneer Grover and wife, Madhuri Jain for creating bogus HR firms where 8 HR companies have the same address of Grover’s family relatives and 5 of these opened bank accounts post invoice date.
Where was the loophole?
The issue arose shortly after Ashneer Grover gained fame on Shark Tank Season 1, leading to the BharatPe board reporting a potential fraud by him and his wife, Madhuri Jain, in May 2023. It led both oysters from the company. However, the reported fraud amounted to Rs.82 Crore rupees and beyond.
After the investigations were concluded by the EOW, it was revealed earlier this week that Ashneer Grover, his wife, and other family members had established 8 bogus HR firms and there was a transfer of more than Rs.7 Crore rupees into those accounts. Five firms among these had residential addresses to one of the family members of Madhuri Jain. The KYC accounts of the banks receiving these payments reflected the same address.
Invoices from these fake HR firms were submitted to BharatPe for payment even before the firms opened bank accounts, and none of these 8 firms conducted any HR staffing or recruiting activity for BharatPe. These payments were later self-withdrawn by the members of the Grover family.
So, why were these companies set up and if they did not do any substantial activity for BharatPe, then why and how were payments made to them in the first place? All these questions are looked forward to being answered after the investigation by Delhi's EOW.
How did everything start?
In March 2018, Ashneer Grover launched BharatPe which was a notable development in the financial sector. The following July, Grover's wife, Madhuri Jain, assumed a position on BharatPe's board. By December 2018, Grover took the helm as CEO and later elevated to the position of Managing Director in August 2021. However, tensions arose in October 2021 when Grover and Madhuri Jain engaged in a dispute with Kotak Mahindra Bank over Nykaa's IPO, leading Grover to issue a legal notice to the bank. Simultaneously, the Directorate General of Goods and Services Tax (DG-GST) conducted a search at BharatPe.
The virality from Shark Tank
November 2021 marked a shift as Ashneer Grover became a jury member on Shark Tank India. However, January 2022 brought controversies, including the emergence of an audio clip allegedly featuring Grover and a Kotak Mahindra Bank employee, as well as an email spat with Sequoia. Grover went on voluntary leave, prompting BharatPe to announce an independent audit over corporate governance issues, including financial concerns. In February 2022, preliminary investigation reports implicated Madhuri Jain in financial fraud, leading to her dismissal.
December 2022 saw the release of Grover's autobiography, "Doglapan," but also his resignation from BharatPe. In his combative resignation letter, Grover accused the company's investors and board of treating founders as 'slaves' and cutting 'founders at will.' BharatPe countered with allegations of embezzlement by the Grover family, filing a lawsuit in December 2022 for an alleged Rs.81.28 crore fraud. Matters escalated in May 2023 when Delhi's Economic Offenses Wing (EOW) filed an FIR against Grover and his family for alleged fraud.
By November 2023, an EWO preliminary investigation uncovered links between Grover's family and recruitment firms, revealing the issuance of backdated invoices.
The Social Media Controversy
Multiple rounds of controversy on social media has happened to the point that Ashneer Grover has also raised level allegations against Rajnish Kumar, former SBI chairman and prior board member of BharatPe.
He accused him of "delivering nothing and creating a deflection to hide behind" in a post on social media platform X (formerly Twitter).
In a tweet, Grover said, “Building a big business from scratch is the hardest thing to do. Inheriting a business and keeping it running at the same level is still hard. Delivering nothing and creating a deflection to hide behind is the easiest. Well done, Rajnish Kumar (well technically, ‘nothing’ has been done, but still)! But I doubt your world record of destroying $8 Bn at SBI and $3 Bn at BharatPe back to back as Chairman can be hidden behind a smoke screen of cases against me. Especially after you make it an insurmountable hat-trick of billion dollar write-downs with Byju’s next."
During this period, Grover engaged in a verbal altercation with CapitalMind founder and CEO Deepak Shenoy.
Deepak Shenoy tweeted on X,“Ye alag aur phir wo alag jo EOW ne discover kiya tha ki recruitment fees se jugaad liya...secondary se khush rehte to shaayad ye din dekhna na padta Ab uske printout mein thodi se date wali galti ho gayi i guess. Dhone mein to aap mahir ho hi, tabhi to launder ka case hai.”
The grover family has so far denied these allegations. The couple were asked to appear for investigation at the Mandir Marg, and Madhuri Jain was questioned yesterday by the Delhi Police’s EOW. Ashneer Grover was also summoned, but he did not appear for questioning yesterday.
Writer at Xeloxo
3 months ago