Unicorn in trouble as BharatPe fires its co-founder Madhu Jain Grover for misuse of funds

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BharatPe is one of the leading fin-tech startups of India to have achieved unicorn status. Founded in 2018 by Ashneer Grover. Madhu Jain and Shashvat Nakrani, BharatPe is valued at 2.8 billion dollars in the fin-tech market. But, recently not everything is going well with the unicorn company as the board fires its co-founder Madhu Jain Grover. 

Credit-LinkedIn

Bharat Pe received a lot of limelight after its founder Ashneer Grover featured as an investor on the entrepreneurial reality show, Shark Tank India. Many viewers criticized Grover for his harsh views and comments about entrepreneurs and their products. Others felt he was honest in showing the realities of the entrepreneurial world to the participants. 

But, not all the limelight has been positive for Grover or BharatPe as the company has been in a tussle with its board members. 

Ashneer Grover was also in loggerhead with Kotak Mahindra Bank. His conversation was leaked on social media, though Grover denied all claims. 

Why did the board come to this decision?

Now another trouble has descended upon Grover and his wife. On the 23rd February 2022, BharatPe’s board members sacked Madhu Jain Grover for the misuse and misallocation of funds. With the sacking, her equity and stock options have also been canceled.

Credit- Business Today

Madhu Jain Grover oversees the finances of the company and has been charged with financial fraud. 

“As per your query, we can confirm that the services of Madhuri Jain Grover have been terminated in accordance with the terms of her employment agreement,” confirms BharatPe’s spokesperson.

Last month, BharatPe’s board conducted a preliminary financial audit and investigation via an advisory firm, Alvarez & Marsal (A&M). 

The firm flagged many financial irregularities such as non-existent payment invoices of vendors and consultants. 

BharatPe even brought PwC to look into the company’s financial transactions which highlighted that the funds were misused by fake HR consultant firms. 

After her termination, Grover did not hesitate to post on Twitter and jab at the board members by calling them misogynistic individuals.

The tweet read, ‘ And treat women like objects like I’ve been treated in the whole episode with the male chauvinistic Board supporting you.’ @timesofindia @htTweets @chandrarsrikant @bharatpeindia @BhavikKoladiya @SuhailSameer14 @HarshjitSethi @mickymalka.

Ashneer Grover’s Exit From Bharat Pe

Ashneer Grover has hinted that the board and the CEO of BharatPe have conspired to remove him and Madhu Jain from the company. 

He plans to sell 9.5 percent of his stake in the company which is valued at Rs 4000 crores. Reports are saying that he is currently in talks with potential investors. 

Grover has also claimed that the investigation of the advisory firm is invalid as it goes against the shareholders’ agreement and articles of association. 

What about the employees of BharatPe ?

The internal tussle within BharatPe has left the employees in a frenzy. Many have floated their resumes to leave the company. 

Rebuking the reports of employee exodus, CEO of BharatPe, Sameer Suhai has assured that the company has four times the cash flow of $600 million dollars to sustain the operations and employees. 

Even with vacations and perks, employees feel disappointed with the toxic work culture and internal problems grappling BharatPe.

With a weak business model, overspending on acquisitions, and internal cracks, the unicorn start-up seems to be in a continuous cycle of trouble. 

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