Ashneer Grover and Madhuri Jain Grover (Image credit: @ashneer.grover/Instagram)
The BharatPe-Ashneer Grover saga continues. Many expected the mercurial founder’s upcoming memoir (titled Doglapan) to serve as a conclusion to a tumultuous episode that culminated in his resignation and the firing of his wife and others from the company earlier this year.
But, those at the helm of BharatPe seem to have had other plans.
Yesterday, the fintech unicorn filed a civil suit against Ashneer Grover, his wife Madhuri Jain, and other family members, seeking over Rs 88 crore in damages for alleged misappropriation of funds.
In addition, the company has filed a criminal complaint with the Economic Offences Wing on 17 counts, including embezzlement, forgery, and criminal breach of trust, which could land the Grovers in jail for up to ten years if proven guilty.
Moneycontrol accessed and reviewed a part of the 2,800-page civil suit filed by BharatPe against the Grovers, which alleges an astounding web of fake bills and misappropriation of company funds for personal use.
Here are a few of those instances of alleged misuse of company funds:
Non-existent vendors were paid Rs 72 crore
Madhuri Jain, Ashneer Grover’s wife and the former head of controls at BharatPe, signed off on payments to third-party vendors who did not provide any real services or goods to the company, according to the company.
These payments to approximately 30 such vendors, totaling Rs 72 crore, came to the attention of the GST department when the company claimed input tax credit on the payments. In addition, the tax authority imposed a Rs 1.66 crore penalty on the company.
Siphoning off Rs 7.6 crore in the name of recruitment services
BharatPe uses third-party contractors to help recruit some of its employees, the lawsuit said. According to the suit, Jain approved payments totalling Rs 7.6 crore to eight such vendors who did not assist the company in recruiting any employees.
BharatPe CEO Suhail Sameer, for example, was shown to have been hired through a human resources (HR) vendor named Vikas Enterprises, despite being hired directly by the company.
Moreover, the company claims that Jain and her family members not only connived to carry out these fraudulent transactions on recruitment services, but that these eight vendors also had close ties to them and to each other.
Grovers’ duplex rent, LED TVs, fridge
On company accounts, the Grovers lived in a posh South Delhi neighbourhood called Panchsheel Park from September 2019 to January 2021. The duplex apartment was originally requisitioned as a company guest house, but the Grover family used it as their residence, according to the suit.
The family also invited BharatPe employees to a Diwali celebration on the duplex’s terrace, complete with ‘catered food, drinks, and decoration.’
The company footed a bill of Rs 52 lakh as rent and security deposit for the duplex. (The Grovers still live in the same neighbourhood, albeit in a different apartment.)
Furthermore, the company claimed that the Grover family used company funds to purchase home appliances such as LED television sets and a refrigerator.
Interior designing of BharatPe office by Madhuri Jain’s own company
Offices require renovation and decoration. More so when it’s a brand-new unicorn. However, the issue with BharatPe was that a company that received contracts for such work was owned by Madhuri Jain.
The company claims in its lawsuit that Jain awarded these contracts to her own interior design firm, Mauve and Brown (M&B). Mauve and Brown had already been paid around Rs 48 lakh for their services before the company’s board was made aware of the related party nature of these transactions.
But that’s not all.
The company’s accepted vendor approval process at the time required that any proposed vendor’s quotes be compared to two independent market quotes. Jain was thus required to obtain such quotes in order to approve the transactions with M&B.
Instead of following this vendor approval process, she obtained fictitious quotes from vendors that were not independent and thus could not be used to validly approve transactions with M&B.
According to the lawsuit, some of these quotations were clearly backdated in order to give legitimacy to earlier transactions with M&B. Two of the vendors have similar names, the quotations were received within a minute of each other, and the quotations are written in similar typefaces, raising concerns about the authenticity and validity of the quotations.
Furthermore, ‘M/s Annapurna Interior Decorators & Furnitures,’ one of the vendors who sent these backdated quotations, was a subcontractor for M&B, so its quotation was not independent.
BharatPe has now claimed Rs 1.85 crore in payments to M&B that were made in violation of internal controls by arranging for fictitious quotes.
Family trips and vacations on company funds
In its suit, BharatPe claims that a Rajasthan-based travel agency raised invoices in the names of Ashneer Grover and Madhuri Jain for foreign trips twice — once for the couple and once for their minor children. The company also claims that the couple used company funds to take family vacations to Dubai and the United States.
Further, for a trip to Dubai that the company arranged for its CXOs, Jain allegedly misappropriated funds to pay for visa-related expenses of family members. In another instance, BharatPe has alleged that Jain made the company pay for the Mumbai-Delhi flight tickets of her family members who did not work for the company.
Skincare paid for by the company
According to BharatPe, Madhuri Jain requested and received reimbursement for a Rs 22,500 skincare treatment in August of last year. The invoice was initially raised to her interior design firm M&B, and she later sought reimbursement for it, which she was not authorised or entitled to do.
One trip to Thailand, two bills
In another instance of alleged misappropriation of funds, the Grovers arranged for a payment to be made to Golden Holidays, a vendor purportedly providing travel agency services, for a booking in Thailand. However, Golden Holidays did not offer any services. Furthermore, the company had already paid another travel agency for the same bookings and dates.
“The payment to Golden Holidays is evidently a double payment caused to be made by Defendant Nos. 1, 3 and 4 for the misappropriation of funds from the Plaintiff,” the company said.