BharatPe founder Ashneer Grover denies allegations of fraud, poor work culture; guns for his investors

Ashneer Grover is calm. When did someone last say that? The man whose anger and blunt words have become a meme and a national talking point is calm and measured as our interview starts.

Grover is co-founder and managing director of BharatPe, a company that was better known for its QR code aggregator app, service and surprise bank licence until a month ago, but is now best known for public spats between the founder and its main investor, allegations of fraud, poor work culture and an audio clip featuring Grover allegedly hurling choicest abuses at a Kotak employee.

Grover denies everything though. Literally, everything. He denies that the audio clip voice was his, that he had issues with Uday Kotak, that he used foul language against anyone, that his company may have indulged in fraudulent practices, that BharatPe had cultural issues leading to many senior employees leaving … the list goes on. Grover was sent on leave for three months for some of these reasons, and BharatPe is now being probed by Alvarez and Marsal and PwC, which are supposed to run a fine-tooth comb through its governance practices. But he denies it all.

Now Grover is gunning for his investors, who he says have “arm-twisted him” into going on leave and facing public backlash. He is armed with three separate law firms to fight with investors to either bring him back to head BharatPe or give him a cool Rs 4,000 crore to walk away. He will have it no other way. He made it clear that current CEO Suhail Sameer does not have Grover’s support, and that he is the “investors’ puppet”.

As our 80-minute interview goes on, the calmness gives way to emotions. The Grover whom people have seen on Shark Tank, and who his employees speak of, appears on and off. Words are not minced. Threats are made. Everything is suddenly clearer, or more confusing than ever, depending on how you look at it. But one thing is clear. There is more than enough blame to go around for BharatPe’s condition. The only question is, who takes the bulk of it?

Since Grover has made allegations against his investors and BharatPe CEO Sameer Suhail, we reached out to concerned parties for their comments. Moneycontrol is yet to hear back from BharatPe. Sequoia India and Tiger Global declined to comment while Coatue Management and Ribbit Capital did not respond to queries.

Here’s the conversation, lightly edited for clarity.

Ashneer, the audio clip started it all. How do you explain that?

It is not me, my voice, nothing. I’ve never participated in any such conversation. There are a lot of people who are very jealous in the market. It’s like saying how can someone become so successful and create such amazing businesses within such a short span of time, while we have been at it for 10 years, 12 years. That jealousy has unfolded into this large conspiracy.

The Kotak issue was absolutely not even an issue. You have a problem with the service provider. You raise a complaint, that gets resolved, or doesn’t get resolved. And it’s a dead thing. Then someone, a third party comes up and says, what was this dispute between you two, you now have to explain to everyone in the public. The audio clip is fake.

You allege a conspiracy. Why would someone do this?

BharatPe is the company which made MDR (Merchant Discount Rate) zero. All payment companies before us were earning the revenue from MDR. Of course no one likes us. Secondly, we understood that lending is a major business and we started building our lending muscle very early on. Like that lending. And there are businesses that have not sort of been able to graduate from pure payments to lending. Then we went into BNPL (Buy Now Pay Later) and P2P (Peer-to-Peer) lending and borrowing, which the other players had not done. Most importantly, we got the bank licence, which has made everyone jealous.

Equally important is that we’ve got a bank licence in the name of BharatPe. Not in the name of Ashneer Grover. So I have not only achieved whatever I’ve achieved, I’ve achieved it in the manner which is institutionalised right. The company is the 49 per cent owner of Unity Small Finance Bank, not Ashneer Grover. Vijay Shekhar Sharma owns 51 per cent of Paytm’s Payment Bank, has anyone asked him of conflict of interest there?

Reports and our sources allege that BharatPe was run with an opaque structure. There are allegations that your family members siphoned off money, and that money was paid to the family that could have normally been paid to a recruiter for hiring of CXOs.

Absolutely fake news. Here is a 3.5-year company. It has been audited by (one of the) Big Four – Deloitte. Up till FY21 all financials have been audited. I have got a board where four of the 10 investors have a board seat. There are independent directors by structure. There is Rajnish Kumar and Kewal Handa. One is ex-SBI chairman and the other one is Union Bank chairman. So, if you’re telling me there is anything wrong, then you are pointing a finger, not at me, but at the whole board, including the independent directors and the investor directors. Are we questioning Deloitte’s audit or the board’s incapability of looking into an audit?

If any of these things are found out to be true, then everybody is culpable, certainly not just you. But we are hearing from insiders that there was a conflict of interest, money was siphoned.

If you are hearing directly from people then is this an independent review at all. If people associated are speaking to the media and giving specific leaks then what is the audit for? It is a witch hunt.

The board is doing a governance review, it involves practices that you have implemented at the company over the years. So it is basically a review of everything that you’ve done in the last three years.

So review it. What am I scared of? I am the only startup in India which has built $6 billion of value by spending less than one $50 million dollars. Forget the audit, forget the allegations, just put the numbers of Razorpay, Paytm and CRED, any fintech which is valued higher than me. How much money have they spent and what’s the value being created? So by that logic, anyone who spent more money than me has done a fraud.

But that wasn’t our question. We haven’t asked how much you have spent to build the company.

I am not here to answer you. I’m going to answer the issue at hand. What is this so-called public audit happening to me?

What we are trying to ask is that there are pointed allegations…

(Cuts in) Absolutely false allegations. I will not answer anything which has not been asked of me by the board.

If it is such a well run audit you (board) are doing, why are there so many media leaks? Have you ever heard of any company doing a governance review, where the person who’s doing the governance review is declared in public? Those are confidential processes. Here’s a board who’s coming out and saying, oh, we’re getting the review done by this guy.

Why do you think it was done?

It is clearly arm-twisting.

Do you think your board is arm-twisting you?

Of course. What is this sending on temporary leave of absence? What is this concept? Where is it defined? It is not defined in my SHA (shareholder agreement). It is not defined in the employment contract. Where does this come from? You said, there’s a lot of noise around you around the Kotak matter. There’s no Kotak matter now.

If you’re saying your board has some vendetta, why are they doing that? All your incentives are aligned similarly. All of you stand to make money from the same set of things?

No, no, no it is not that. It’s a classical case. Whenever there’s a very tough industry to build a business in, you need a tough founder. Someone who has a mind of his own.

Now, just because of someone externally targeting me, the board feels that going forward, will he (Grover) become our biggest liability from being the biggest strength because he is headstrong. Now bank licences require people to wear ties and coats and be not what he (Grover) is, as a personality. Therefore it is the best thing for us to get rid of this guy. It is a witch hunt.

What is your relationship with Sequoia now? Sequoia has always provided more credibility to startups. Do you think they’ve been unfair to you?

With all investors, what I have understood is that you only have one relationship. That is a relationship of money. All the investors are out there to make money. The sad part in India is that founders like me are taken for granted.

What is happening to me is exactly what happened to Binny (Bansal) at Flipkart. When Binny came out there was a huge scene created of him having an affair with someone. Where’s that thing? What happened? Does anyone even talk about it?

It’s not something only limited to my set of investors. Globally now the stocks have started taking a hit. People have gone from, let’s deploy more capital to let’s employ more lawyers, kind of a mode.

Everyone who is an investor now thinks he’s a proxy operator and he’s here to improve things in his portfolio rather than making new investments. And this is just simple investor overreach. The government has to take note of this and see how they are protecting the value of creators. In this case, founders who sacrifice so much, build so much, just to be put under the bus at the first instance.

Was Suhail Sameer also appointed as the CEO with your blessing last year?

He was appointed with my blessing but I’ve already told the board he does not enjoy my confidence on the board of directors at least. If they want to use him as the executive till the time I’m on leave, it’s their prerogative. He doesn’t enjoy my confidence to be the director. I have already written to the board that he should be removed as a director.

I have the right to nominate who sits as my nominee on the board. In the last one month, I have seen him operate as a puppet of the investors, not as my nominee.

But except for the last one month, any other reason why you would prefer someone other than Suhail. Even before that, were there any indications for you that you would prefer someone else?

In the last round, he sold Rs 11 crore worth of ESOPs. I have created value for him, real value not paper value. After having done everything and giving someone full degree of freedom to operate, if you operate in a manner and side with the investors when I need you the most, then you don’t enjoy my confidence. You don’t have a spine. Why should the puppet of the investors be my nominee on the board?

But if you hold the view that the board is arm-twisting you and that Suhail is not the right guy. So then, in your opinion, who would be fit to lead the company as the CEO?

I am the fittest guy to lead the company.

Did the board inform you before they hired Alvarez and Marsal and more recently PwC?

No, the board has been operating in a very opaque manner. Board meetings are held at short notice of two hours. I get to know what happened at the board meeting via the agenda. My responses to the board are not taken on notice. Which is fine. The way the board is operating, it is clearly setting itself up to be judged as a biased board, under any code of law. They will eventually end up paying the price for the way they are operating.

We spoke earlier when Rajnish Kumar was made the chairman of the board. You seemed very happy. But now do you think it was a good decision?

I have nothing against independent board directors. Rajnish Kumar and Kewal Handa are much above the stature than BharatPe or me. The way the investor board members are acting is against any tenet of Indian law. I have zero faith in anything they’re doing. I won’t be surprised if Rajnish and Kewal will also become completely pi***d with the state of affairs at the board and just step down.

Sources also told us you were contemplating putting in your resignation, but eventually you decided not to. Can you confirm?

Why would I resign? I am the MD. I run the company. If the board thinks I don’t need to be the MD, someone else should run the company. Please put my Rs 4,000 crore on the table and take the key from me.

Founder is a guy who has the spine to raise money from someone and tell them I’m not here to dance to your tunes. I am here to give you a return on your money and give you a higher return on your money than anyone else has given till date. Anyone who’s not doing that is an employee.

You have hired New Delhi-based law firm Karanjawala at a point when a governance review is happening. Was this to take action against investors?

Here is my question to the board. What was the need for a governance review in the first place? You started it, not me. What was the need to invite Shardul Amarchand (Mangaldas) to a board meeting? And then the chairman says “Oh, Mr Shardul we don’t need you here, you can drop off”. So you bring in lawyers to intimidate me, the chairman himself is surprised why a lawyer is sitting here. So you are creating an environment of corporate intimidation. You are trying to lawyer up and arm-twist me.

I’m not a guy who gets arm-twisted. I’m not a pushover founder. I’m going to fight for my rights. You cannot run a pre-judged process against me. You can’t tell me that a governance audit is being done, without telling me what it’s about, and go leak to the press, saying, let’s see what sticks. Let’s disrepute him because if we do that enough he will come to the table and negotiate.

So no negotiation for now?

No no, my point is you’re trying to arm-twist me to come negotiate and take lesser money for my shares. If you don’t need me, I don’t want to make value for you either. I have created two unicorns already; I have the capacity to create three more. So make me an offer, I’ll move my way, you move yours.

So you’re willing to exit the company and sell your stake?

Either I am running the company, and want to be a shareholder, or if I am not, then I have the right to sell it to anyone, no.

You have also mentioned $6 billion as BharatPe’s valuation a couple of times. Where is this number coming from?

Last round was at $3 billion. From May 2021, when the round was priced, my merchant business was 50 per cent higher. I have got a bank licence, which was not there then. I have built the largest P2P platform, 12 per cent Club, which wasn’t there. I have built PostPe, a BNPL play. We have also merged PMC in addition to getting the licence. If I was running the business, I am extremely confident of doing a $6 billion valuation round.

But a round isn’t done, hasn’t even started. Until the shares are actually priced at $6 billion, isn’t it pointless to say it is worth $6 billion?

No, why? If you want to buy me out you want to buy me out at the fair market value right? In my view the fair market value is $6 billion. Either I’ll run the company or they buy me out, there is no third option.

How will Karanjawala protect you here?

They are litigation lawyers. I have also appointed Ritin Rai and a Mumbai firm called Meraki Law. This is my team of lawyers. They (investors) cannot touch my 9.5 per cent equity. It is cast in stone. Now it is a question of whether they want to have a man-to-man conversation, or spoil their own value.

We also understand that your brand has been hit, and that some entrepreneurs who had taken money from you on Shark Tank are now returning the cheques. What do you think about that?

That’s the funniest thing I’ve heard. I have gone through with all my investments on Shark Tank. There are a few deals I lost on the show where the founders reached out wanting me. So I have had to write more cheques than televised.

A couple of days back when you spoke to The Economic Times, you didn’t seem to have any problems with the board, and seemed amicable and conciliatory. What has changed so much in a couple of days?

I am amicable if you are amicable with me. Even today if the board has a straight one-on-one conversation, I am amicable. But if you’re going to bring lawyers to a board meeting, that amiability has been thrown out of the window.

What happened suddenly? You could argue the board has been going against you for a couple of weeks. Why the change in your approach now?

I am still working towards a resolution but that does not mean I am not going to challenge their ways. What has changed in the last couple of days is still a private dialogue between me and the board. I don’t want to wash dirty linen in public. I will behave with the board how they behave with me.

Ashneer, much before this specific issue, multiple employees have complained that BharatPe has a poor culture, that it was strict like a school, that people were called to office while COVID was raging, and more. Would you acknowledge this?

These are stupid stories. If an employee misrepresents that he is on leave and goes on a romantic holiday to Goa with my EA (executive assistant) I have the right to ask them to be truthful. People want to hire their part of the story. If two people in a company are not being discreet, sorry I’m going to have to step in.

You tell me, what is culture? If I am the only guy driving culture. Then I should be owning 100 per cent of the company.

So the bad culture is because of you as well as others?

No, no, I completely deny this. I have a simple culture of simplicity, performance, high pay, high ESOPs. I can promise you, there is not a single person in my company who in his previous employment would have made more money than at BharatPe.

You may be a very motivated Ashneer, but not everyone may deliver at the same level. Shouldn’t the organisation have space for those people too?

Of course I have space for those people. I have 11 CXOs and a CEO. Which founder has the maturity to understand that everything cannot be done by him and that at some time he has to hand functions out?

Is there room for improvement?

Of course there is room for improvement, that is the concept of building a startup.

What will you do if you come back to BharatPe?

One, get rid of people whose only value is to create politics. I have made a few mistakes in hiring snakes. Those have to be weeded out immediately for culture to improve.

Would you like to say anything to your employees who feel mistreated, perhaps apologise, or have some message for them?

Please put this in bold letters. I am sorry for nothing. I am absolutely unapologetic because I have the best of intentions, I go about my business in a very professional manner. People who know me understand the substance behind the person. So I am sorry but not sorry to anyone.

You could have the best culture in an unsuccessful $40 million company. If you expect that someone will create a $6 billion dollar business in less than four years and want everything to be perfect including culture, sorry just not going to happen. Neither from me, nor anyone else. Fast growth will come at some cost no. I can’t be nice to everyone and deliver month-on-month growth.

With regard to investors, have you been surprised that Ribbit Capital has sided with other investors? We understand that usually on the board they have been among the more founder friendly investors and sided with you in earlier board meetings.

I am not surprised by anything. Investor is neither your friend nor your enemy. He is just there to preserve his own value.

The founder has created value for you, for 40-42 months, and did you even stand beside him when an external issue like Kotak came up? You decided to put him on leave. If so-called investors can’t stand behind the promoter on a single instance where the business is under attack, what are you talking about?

Suhail earlier told us the absence of leave idea came from you-

(Cuts in) That idea was forced into my head basis misrepresentations from Suhail, by Sumeet Singh, our GC, in connivance with investors so that they can otherwise achieve what they wouldn’t have been able to.

He said it came from you and they kept rejecting, until they realised it was important to you.

No, all of them sided with investors and said you should go. He’s lying through his teeth.

Was it his idea, or did an investor propose it first?

That is immaterial but I can tell you none of these guys were standing with me.

If investors buy your shares for Rs 4000 crore as you want, what will you do next?

I will disclose my plans at the right point of time. Right now there are only two ways. Either I come back and clean up the shop, rid it of these unwanted elements, or I am out.

Do you plan to sue members of the board, for defamation or otherwise?

My lawyers will advise me on my legal strategy. Anyone who will say anything unsubstantiated against me, I will get their house, car and everything they ever built. I’m very clear about that. Be clear of the repercussions if you say something without any modicum of truth.

Now when you’re on leave, are you taking time out for yourself, or just busy with all this?

When you aspire for bigger things, the problems are also that much bigger.

As far as I’m concerned, I’m very happy. Me and my friends have a hearty laugh over all that’s going around in the media. My 12-year-old and 8-year-old have grown up very fast the last 3 years, and I have missed it because I have been busy with work. Every moment spent with kids is refreshing.

Are you considering something like Vipassana, to curb your anger or for general betterment? A lot of founders are spending more time on that and other forms of spirituality.

I’m a commercial person. I’m not in retirement mode. Meri umar nai hui ye abhi (I’m not that old yet), that I go for Satsang or Vipassana. You do all this stuff when you are going towards your deathbed.

I have a lot more to build, and would rather spend time on what the next billion-dollar idea is, what kind of people I want to work with, and where all this board politics does not hamper the value I am trying to create. Maybe post 65 I’ll do all this Vipassana and Satsang.
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