Why Ashneer Grover quit BharatPe
He was once the founder and CEO of one of the most famous fintech companies in India – BharatPe. He appeared on the Indian start-up reality show Shark Tank India and became an instant hit among memers for his combative and brutal attitude.
He was once the youth icon for entrepreneurship, who told aspiring entrepreneurs on national television to go home and find a job. The man is none other than Ashneer Grover, the founder of BharatPe. However, the tables seem to have turned on him; no, not on Shark Tank reality TV, but in his real life.
Ashneer Grover resigned as the Managing Director of BharatPe, after months of controversies, allegations and the removal of his wife Madhuri Jain Grover as the Head of Controls at the company. The fintech company said Grover’s resignation was received just minutes after a board meeting was called to discuss an audit report.
WHAT HAPPENED?
It all started with an audio clip that went viral, though the storm was kicking up well before that and the viral clip only turned out to be a trigger.
Ashneer Grover came into the limelight when an audio clip of him allegedly threatening a Kotak bank employee with harm went viral. Grover became the punchbag of the public following the controversy, and went from being a youth icon for entrepreneurship to an icon for all that’s wrong with the start-up culture.
Kotak Mahindra Group filed a case against Grover over the alleged abusive behaviour towards its employee. And so the domino effect started.
The Kotak audio case soon became history when Grover took a voluntary leave of absence till April – now we know how that turned out. His wife Madhuri Jain Grover who also served as the Head of Controls at BharatPe, also went on leave.
Soon enough, there was news that the BharatPe board had set up an internal audit. Allegations started flying around that Grover and his wife had embezzled company funds. Of course, Ashneer Grover and his wife have rejected the allegations.
In February 2022, Madhuri Jain Grover was removed from the company for her alleged role in using company funds for personal use. Her ESOPs were also frozen by the company. Madhuri called her termination of services ‘male chauvinistic' behaviour.
Following Madhuri's removal, Ashneer Grover even filed an emergency plea with the Singapore International Arbitration Centre against BharatPe’s audit; however, the plea was tossed out. Grover has now resigned.
It isn’t as if Grover's trouble with the company board started out of the blue or this year. His headstrong personality was cited as a problem and he was reportedly made to give up the CEO position and settle with the position of MD.
BharatPe has also responded to Grover’s resignation, saying that he no longer serves as an employee, founder or director at the company. The Board will further discuss the audit report, and Grover's resignation.
WHAT HAPPENS TO GROVER’S SHARES IN THE COMPANY?
When the trouble had erupted, Ashneer Grover had told Moneycontrol that he won’t leave the company until he’s paid Rs 4,000 crore. Now, it is unknown where that demand sits on the table. Currently, Grover holds about 9.5% shares in the company, according to Business Standard. There is speculation that the Board may decide to claw back some of the shares of Grover. Though Grover says it is not possible.
GROVER’S CANON OF THREATS
Ashneer Grover spoke to Moneycontrol about his decision to quit BharatPe and during the interview, made some startling accusations and threats against BharatPe Board members, investors and almost everyone else related to the company.
1. “I have so much dirt on them, I can tell you tomorrow if I start speaking, Sequoia will not be able to make a single investment in India. You will have ED, CBI behind them.”
2. “I dare Sequoia to come on a TV debate.”
3. “I am challenging Rajnish Kumar [BharatPe Board Chairman] to a TV debate.”
4. “I will take this up to the Minister of Corporate Affairs.”
Ashneer Grover also had a demand from the Government of India: “Zoom meetings have to be banned in India. They are being misused. How can you allow someone to be a director when that person has never come to India?”
Grover shared some valuable advice for young entrepreneurs and founders:
1. “Don’t be a slave to these VCs.”
2. “Maintain more than 51 percent equity; don’t dilute below that.”
Grover may or may not have given these valuable advices on Shark Tank India, but he is doing so after his own trials and tribulations. That is unlikely to get him back to BharatPe at the moment though.