Fintech unicorn BharatPe Tuesday said it has initiated necessary action against former co-founder Ashneer Grover to claw back his restricted shares following the PwC governance review.
In a statement, the Sequoia Capital-backed fintech firm said it will take all steps to enforce its rights under the law.
The move comes after the board of BharatPe initiated a corporate governance review in January this year following the ouster of Grover and wife Madhuri Jain for alleged misappropriation of funds.
In March, VCCircle reported that as per the shareholder agreement, Grover may have to forfeit unvested stock options equivalent to around 1.4% of his shareholding if the PwC investigation report finds evidence of misconduct against him.
BharatPe’s statement said it has also terminated the services of several employees in departments who were directly involved with blocked vendors. “If required, the company will be filing criminal cases against some of these employees for the misconduct and act of cheating committed by them against the company,” it further said.
The fresh measures - taken after a detailed review of the PwC report over the last 2 months -include a new code of conduct for senior management and employees, regular internal audits and a comprehensive ‘Vendor Procurement Policy’ that blocks vendors involved in malpractice and mitigates risk of employees indulging in suspicious transactions.
The new code of conduct, BharatPe said, “will be applicable to senior management and employees and has now been implemented. The code of conduct inter-alia deals with conflict of interest and other issues that will help strengthen overall governance in the company.”
The fintech company has also appointed a full-time chief human resources officer (CHRO) and an interim chief financial officer (CFO). “The company is also in the process of finalizing the candidate for the role of CFO, and the same will be closed in the current quarter,” the statement noted.
For its internal audit, it has roped in global audit firm Mazars India.
After resigning on February 28, Grover accused executives of Sequoia Capital and Ribbit Capital of being 'far removed from reality' and treating founders as 'slaves'.
For the governance review, the company had appointed turnaround professional firm Alvarez & Marsal (A&M), law firm Shardul Amarchand Mangaldas & Co. (SAM) and consulting form PwC to determine willful misconduct and gross negligence by Grover.
Amid multiple governance scandals including at BharatPe, Zilingo and Trell, some of its portfolio companies of Sequoia Capital, the venture capital investor recently stated in a blog post that it has 'zero tolerance for proven wrongdoing'.
In April, Sequoia Capital managing director Shailendra Singh resigned from the board of Zilingo, a Singapore-based B2B marketplace for fashion businesses, after its co-founder Ankiti Bose was suspended amid an investigation into the company’s financial accounts.
Similar allegations surfaced in Sequoia’s Surge-backed Trell where its co-founder Pulkit Agrawal was charged with fraud allegations after EY India conducted a forensic audit.
