BharatPe co-founder and managing director Ashneer Grover has filed an arbitration plea with the Singapore International Arbitration Centre (SIAC) claiming the company’s investigation against him is illegal, a person directly aware of the matter said.
Mint has also reviewed excerpts of his arbitration plea.
“Ashneer’s point is, the Alvarez & Marsal report and preliminary investigation is invalid because it was in violation of shareholder agreement and articles of association. His argument is that the company has no authority to conduct such an investigation,” the person cited above said, requesting anonymity.
In his plea, Grover alleged that despite numerous representations/objections, BharatPe deliberately kept the review and assessment by the review committee an opaque process and gave him no chance to present his case. “The review committee, which is constituted in violation of the terms of the SHA (shareholders’ agreement), continues to act to the detriment of the claimant (Grover). The claimant stands to suffer extreme prejudice if the operation of the review committee is not prevented and stands to suffer irreparable harm and damage,” Grover said in the plea.
The first hearing happened on 20 February. Grover is represented by Karanjawala & Co., while BharatPe is represented by senior counsel Abhishek Singhvi. Both counsels declined to comment. Mint sent detailed queries to BharatPe and Grover, which have remained unanswered.
In the plea, Grover is seeking interim relief, and one pertains to Suhail Sameer, chief executive of BharatPe.
“The appointment of Suhail Sameer as a director be kept in abeyance, and he be restrained from discharging any functions as director of the company,” Grover said in the plea.
In statements this month, Grover has called for removal of Sameer. But the removal of the CEO as a director will require the consent of Grover’s co-founder Shashvat Nakrani. Further, Grover has sought that the present review panel should be dissolved, and a new ‘lawful committee’ should be constituted to assess and conduct an all-encompassing review of the affairs of BharatPe.
"An order to direct the respondent (BharatPe) not to rely on the reports delivered by the review committee in its current form and constitution or reports delivered by any persons/entities appointed at the behest of the review committee,” said the plea document. Further, it said no adverse action shall be taken against Grover under the SHA or related agreements.
On whether the board of any company has authority to launch an internal investigation, Fereshte Sethna, senior partner, DMD Advocates, said, “The board is all-powerful.”
“Multiple reasons abound to initiate legal challenges—often for achieving temporary strategic pushback—but absent compelling reasons, it may not withstand scrutiny,” she added.
Even as the legal fight escalated, Grover and BharatPe have had settlement talks over the former’s exit terms, two people aware of the matter said.
“The company has offered a settlement option to Grover—on which he is yet to revert. BharatPe doesn’t have to offer a settlement, but it is still offering because it wants to get done with this as soon as possible and move on. Because if it doesn’t take the settlement route, the matter is expected to go on for months,” said the first of three people cited.
Grover has insisted on getting a cash exit in return for his equity in BharatPe valued at ₹4,000 crore through public statements.
“The company is not likely to agree on an all-cash deal. The settlement that BharatPe has offered involves Grover continuing to have his stake in the company, but he won’t get any cash in hand,” said the second person.
If the settlement happens, Grover will be walking away with a “certain equity” at a much lower valuation, he added.
