According to BharatPe CEO Suhail Sameer, the fintech company will focus on modifying some governance procedures, such as how procurement is handled within the organization and boosting compliance and transparency.
This comes after Alvarez & Marsal presented the corporate board with its final audit investigation report. Sameer also told ET’s Tarush Bhalla that BharatPe has hastened its ambitions to go public and will try to list on Indian bourses within two years, after internal audits and the scandal surrounding former managing director and cofounder Ashneer Grover, who stepped down recently.
The corporation has undertaken a comprehensive corporate audit. What findings and corporate governance flaws did the auditors uncover?
The word “loopholes” is a powerful one. I don’t believe BharatPe broke any of the specified laws that the corporation was required to follow. The corporate governance study and improvements are more forward-looking, aligned with our upcoming IPO in two years.
We’re…enlarging the board of directors and adding more independent directors. We’re putting in place all of the policies for vendor onboarding, procurement, and conflict of interest approval. The third thing we’re doing is imposing our own higher criteria for determining “what is the dispute.”
Many investment banks and consultancy firms are prohibited from investing in certain businesses. So, we’re basically putting something in place to see where you can spend your money in a private capacity, what board positions you may take, what kinds of outside business interests you can pursue, and so on? According to your response, the audits were preventative.
What were Alvarez & Marsal’s ultimate findings after auditing the company?
The conclusions of A&M and PwC have been communicated to the board, and the substance of those findings is solely known to BharatPe’s board. They’re a lot more forward-thinking… I believe a lot has been made of it – money laundering, for example. But it’s a case of a misbehaving employee. We’ve learned from it, and we’ve put mechanisms in place to hopefully prevent similar events in the future.
What will be the main focus of BharatPe in the future?
Scaling the merchant business is one of the company’s main goals. We’ll be releasing one or two new merchant products. By March 2023, we will have increased our annualized total payment value (TPV) from $16 billion to $30 billion. We can cross-sell additional products with a higher TPV. Our annualized revenue run rate has surpassed $110 million. We’ll start offering auto loans to businesses.
PayBack has 100 million users on the consumer side. Last month, PostPe’s TPV surpassed $50 million, and we expect to end the fiscal year with a TPV of $200 million. We plan to go public in 18-24 months. When we go public, we want to be profitable in the merchant industry.
What is the problem with the ‘12% Club’?
It’s an asset management product, and in January, we were in the midst of a Covid-19 wave, with our NBFC partners refusing to disburse loans. As a result, our partners recommended closing the investment window until the asset-liability situation at their end stabilized. Existing users are continuing to show interest, and new users will be onboarded by June.
According to sources, BharatPe is attempting to reclaim Ashneer Grover’s shares. There was also a request for arbitration. What is the current status of Grover’s shareholding?
It is not my decision whether there will be another court battle or a clawback on shares. It is the board’s decision, and BharatPe’s board will make that decision at the proper time.