Amidst the ongoing investigations by an external auditor of alleged financial malfeasance by co-promoter Ashneer Grover and his family members, the CEO of beleaguered fintech company Suhail Sameer has written to the company’s employees.
In the missive Sameer has tried to assuage employee concerns surrounding governance issues claiming that ‘what was being written was nothing but unsubstantiated rumours.’
Even as reports of employees flooding the market with their resumes – following uncertainty at the company regarding some governance concerns on which investigations are ongoing – continued to circulate, the CEO in his note to employees has said that ‘…none of it has any bearing on the medium to long term health of the business.”
Following leaked screenshots of an interim report submitted by Alvarez & Marshal appointed by the company’s board to look into the whole matter, the CEO claimed in the communique with employees that ‘..the review partners to share an interim report with the board in a couple of weeks.’
Interim report
The interim report alleges that he fintech firm was paying recruitment fees to a number of ‘consultants’ for the employees recruited through them. In five such cases, employees have confirmed their joining date as the one mentioned in the vendor invoice but they had no knowledge of being recruited or engaged through the said ‘consultants.’
The report pointed fingers at Madhuri Jain Grover, the wife of Ashneer who used to head the Controls function at the company and another person called Shwetank Jain said to be her brother.
The CEO of BharatPe in his Friday memo to employees also claimed that January 2022 was the best ever for the company in terms of revenue and margins. He also said that Centrum and BharatPe were working towards building ‘India’s first truly digital bank.’
While BharatPe and Ashneer Grover as well as his wife Madhuri have not officially commented on the interim report, the co-founder is believed to have written to the board seeking the removal of the CEO.
Incidentally, Ashneer while speaking to a website earlier had alleged that there were efforts to oust him from the company and that he was looking for ₹4000 crore valuation for his 9.5 percent stake in the company.
BharatPe’s growth story
BharatPe was co-founded by Ashneer Grover and Shashvat Nakrani in 2018 with the vision of making financial inclusion a reality for Indian merchants. BharatPe has raised over $650 million in equity and debt, till date.
The company’s list of marquee investors includes Tiger Global, Dragoneer Investment Group, Steadfast Capital, Coatue Management, Ribbit Capital, Insight Partners, Steadview Capital, Beenext, Amplo and Sequoia Capital.
In terms of shareholding, Sequoia Capital (19.6 per cent), Coatue (12.4 per cent) and Ribbit Capital (11.0 per cent) hold largest individual stakes in the fintech start-up.
In 2018, BharatPe launched UPI interoperable QR code, zero MDR payment acceptance service and zero MDR card acceptance terminals BharatSwipe in 2020.
Currently, the company claims to be serving over 80 lakh merchants across 150 cities, processing over 11 crores UPI transactions per month (annualized transaction processed value of more than $17 billion).
BharatPe claims to have facilitated disbursement of loans totaling to over ₹3000 crores to over 3,00,000 merchants, since launch. Further, BharatPe’s POS business processes payments of over ₹1,400 crores per month.
In June 2021, the company announced the acquisition of PAYBACK India, a multi-brand loyalty program company with over 100 million members. In June 2021, BharatPe was also given an in-principle approval by Reserve Bank of India to establish a Small Finance Bank, in partnership with Centrum Financial Services Limited (Centrum), the NBFC arm of the Centrum Group.
In August 2021, BharatPe forayed into the consumer space with the launch of its consumer investment and lending product- 12% Club.
Later in October 2021, the consortium of Centrum Financial Services Limited (Centrum) and BharatPe, was issued a Small Finance Bank (SFB) license by the Reserve Bank of India (RBI). BharatPe also entered in the Buy Now Pay Later segment with the launch of postpe in October 2021.
Published on
February 11, 2022
