Grover filed an arbitration petition with the Singapore International Arbitration Centre, alleging that the company’s inquiry of him was unlawful.
According to sources, BharatPe co-founder and managing director Ashneer Grover have lost an arbitration over the company’s probe into him, with an emergency arbitrator ruling that there was no basis to stop the fintech firm’s governance examination.
Grover had filed an arbitration plea with the Singapore International Arbitration Centre (SIAC) claiming the company’s investigation against him was illegal. Grover had taken a two-month leave of absence last month following allegations of using abusive language against Kotak Mahindra Bank staff and fraudulent practices.
According to sources with firsthand knowledge of the development, the emergency arbitrator (EA) has rejected all five grounds of his appeal and denied a single relief. While BharatPe declined to comment because the case was still pending, Grover could not be reached for comment right away.
Grover had argued before the arbitrator that the preliminary investigation was illegal since it was conducted in contravention of the shareholder agreement and articles of association, and the company lacked the right to do so.
All appointments for an outside audit of the company’s internal processes and systems had been labelled “bad in law” by him. He said that members of the committee looking into governance systems, such as the company’s CEO Suhail Sameer and general counsel Sumeet Singh, were biassed.
Grover had also requested that “the appointment of Suhail Sameer as a director be put in abeyance, and he be prohibited from executing any functions as a director of the firm,” according to the petition.
According to sources, EA denied all five reasons for relief. Grover’s claim of prejudice, according to the EA, did not appear dependable or credible because, until a week ago, both Suhail and Sumeet were among the finest employees, and everything about them was outstanding.
Furthermore, everything the corporation has done is in accordance with law and governance standards, thus there is no need to modify anything, the EA stated flatly, dismissing all claims and providing no relief to Grover. Grover can appeal the arbitrator’s decision to the Delhi High Court, according to reports.
Grover said in his application that, despite multiple submissions and concerns, BharatPe purposefully made the evaluation and assessment by the review committee a secretive process, denying him the opportunity to state his case.
According to the sources, the first hearing on the arbitration took place on February 20 and the EA issued the order a few days later. Karanjawala & Co represented Grover, while senior attorney Abhishek Singhvi represented BharatPe.
Grover has called for Sameer’s dismissal in recent utterances. However, BharatPe co-founder Shashvat Nakrani’s approval is required to remove the CEO as a director.
Grover further requested that the current review panel be disbanded and that a new ‘lawful committee’ be formed to analyse and perform an all-encompassing review of BharatPe’s operations.
According to a preliminary internal probe, the financial misdeeds totalled more than Rs 50 crore. According to insiders, BharatPe has hired a law company and a risk advice expert to conduct a more thorough inquiry into claims of financial irregularities.
The audit is being conducted by PricewaterhouseCoopers (PwC) and Alvarez & Marsal (A&M). Madhuri Jain, the head of controls at BharatPe and Grover’s wife, was accused of misusing funds throughout the investigation. Following the review, Jain, who had been in charge of procurement, finance, and human resources since the company’s inception, was sacked.
Since the release of an audio clip in which Grover is allegedly heard threatening an employee of Kotak Wealth Management over his inability to acquire finance for Nykaa’s inaugural share sale, events surrounding the company’s controversial founder has been snowballing at BharatPe. Grover was placed on a two-month voluntary leave of absence beginning January 19 and ending March 31.
