After months of intense legal battles in both Indian courts and international arbitration, Ashneer Grover, the controversial former managing director of BharatPe, has reached a settlement with the company in a high-profile legal case involving allegations of financial misconduct and shareholder disputes, a source familiar with the matter told The Head and Tale.

As part of the settlement, Grover will also return shares (close to 2.6% stake) to BharatPe co-founder Bhavik Koladiya, resolving the share ownership dispute that has been ongoing since Koladiya filed a lawsuit seeking to reclaim shares originally transferred in December 2018, the source added.

In addition, Grover has agreed to surrender 1.4% of his stake to the BharatPe board. His shareholding, which is a little above 4% stake, will be transferred to a Family Trust” – which means Grover will no longer appear on the company’s cap table, the source claimed.

The legal battle between Grover and BharatPe dates back to early 2022, when Grover was accused of financial irregularities, including the misappropriation of funds and recruitment fraud. BharatPe initiated arbitration in Singapore to recover Grover's unvested shares and prevent him from using the title of "founder." This was followed by multiple lawsuits, including civil and criminal complaints alleging fraud amounting to Rs 81.28 crore.

All involved parties are now expected to file for the withdrawal of lawsuits against Grover in Delhi courts.

 

BharatPe was co-founded by Bhavik Koladiya and Shashvat Nakrani in 2017, with Grover joining as a third co-founder in 2018. BharatPe quickly became a fintech powerhouse, and in 2021, it secured in-principle approval from the Reserve Bank of India to acquire a banking license, making it the first fintech in India to do so.

By August 2021, the company’s valuation skyrocketed to $2.8 billion after a $370 million funding round led by Tiger Global. Grover, by then, had become the public face of BharatPe and a well-known TV personality.

However, his success was short-lived. In early 2022, an audio clip leaked where Grover was allegedly heard abusing a Kotak Wealth Management employee over a missed investment opportunity in the Nykaa IPO. While Grover denied the authenticity of the clip, claiming extortion, insiders confirmed that the conversation had indeed taken place.

Soon after, BharatPe’s board initiated an investigation, which revealed multiple discrepancies, including inflated vendor invoices and irregular recruitment practices.

On January 19, 2022, Grover took a "voluntary" leave, followed by the termination of several employees, including Grover’s wife, Madhuri Jain, who was head of controls at BharatPe. By the end of January, the board had decided to remove Grover based on a preliminary report by Alvarez & Marsal, which uncovered instances of fraud.

In December 2022, BharatPe filed several legal actions against Grover and his family, including a civil suit seeking Rs 88.67 crore in damages; and a criminal complaint with the Economic Offence Wing (EOW) alleging fraud, forgery, and conspiracy.

The company also approached the Singapore International Arbitration Centre (SIAC) to reclaim Grover’s restricted shares, which constituted approximately 1.4% of his stake. The arbitration aimed to enforce the company’s rights under the shareholder agreement, which Grover had allegedly breached. As per the company’s captable, Grover held about 8.5% stake in the fintech unicorn.

In January 2023, Koladiya sued Grover in the Delhi High Court, seeking to regain shares he had transferred to Grover back in 2018. 

[A Little Backstory: When Grover joined BharatPe, the shareholding structure was as follows: Grover held 32% equity, Nakrani had 25.5%, and Koladiya remained the largest shareholder in the company with a 42.5% stake, according to Registrar of Companies filings.

However, six months later, in December 2018, just before Sequoia came on board as an investor, Koladiya’s name disappeared from the founders' list due to concerns from large institutional investors about having a person with a jail term in the US. (Koladiya had been jailed for mail fraud and identity theft in the US.) 

The founders and other stakeholders reached an understanding to minimize Koladiya’s public involvement with the firm. This arrangement involved him transferring his stake to Grover, Nakrani, Nakrani’s father (who was also his former schoolteacher), and some angel investors.

After the Sequoia round, Grover and Nakrani owned 29.1% and 23.3% of the company, respectively. From that point on, Grover became the public face of BharatPe, while Koladiya continued to be the tech backbone of the company, albeit as a consultant.]

Fast forward to September 2024, and the conflict seems to have reached its conclusion.

Recently, Delhi’s Economic Offences Wing (EOW) – which registered an FIR against Grover and his family in May last year – arrested Deepak Gupta, a family member and former Head of Procurement at BharatPe’s parent company, over alleged misappropriation of company funds.

 

This arrest reportedly prompted Grover to push for a settlement. 

The settlement, if true, marks a major turning point in this legal saga. 

As part of the agreement, Grover has returned the shares originally transferred by Koladiya. This resolves the dispute over ownership, which had become a central point of contention between the two founders.

While the exact terms of the financial settlement remain confidential, sources close to the matter have confirmed that the deal involves a return of shares, along with a resolution of other outstanding disputes.

Sources also indicate that Grover and his family are planning to leave India following this settlement.

"BharatPe has arrived at a definitive agreement with its former co-founder Ashneer Grover. As part of the settlement, Mr Grover will not be associated with BharatPe in any capacity nor be a part of the shareholding of the company. Certain shares of Mr. Grover shall be transferred to the Resilient Growth Trust for the benefit of the company and his remaining shares will be managed by his family trust. Both parties have decided not to pursue the cases filed. We wish Mr. Grover well. BharatPe continues to focus on delivering industry leading solutions to its merchants and customers driving growth with profitability," BharatPe said in its statement.

Grover, on X (Twitter), posted, "I have reached a decisive settlement with BharatPe. I repose my faith in the management and board, who are doing great work in taking BharatPe forward in the right direction. I continue to remain aligned with the company's growth and success. I will no longer be associated with BharatPe in any capacity, nor be part of the capital table. My remaining shares will be managed by my Family Trust. Both parties have decided not to pursue cases filed. I hope BharatPe continues to grow and succeed for the benefit of all its stakeholders. Peace!"

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- The first detailed profile on BharatPe in 2019.

- This story of 2020 highlighted how BharatPe's lending model could irk RBI. [Interestingly, the closed user group P2P lending was introduced by none other than BharatPe and Liquiloans in India. 

- In January 2021, I reported on BharatPe's aggressive lending play under Ashneer Grover leadership.

- In June 2021, I wrote about Ashneer Grover's personality and how he runs one of India's most popular fintech.

- On January 8, 2022, I was the first to report that the audio clip Grover claimed was fake was, in fact, not fake.

- On January 30, 2022, I wrote that the BharatPe board had decided to terminate Ashneer Grover, a month before the company made it official.

- In February, I was the first to report on the preliminary findings of the Alvarez and Marsal report, which revealed instances of misappropriation and fraud by Grover and his wife.

- Grover files arbitration plea in SIAC claiming the company’s investigation against him is illegal. 

- Grover failed to secure emergency relief from the Singapore International Arbitration Centre (SIAC).

- I was the first to write on BharatPe's shadow shareholding structure.

- BharatPe co-founder Bhavik Koladiya quits.

- I was the first to report on BharatPe slapping civil and criminal cases against Grover.

- BharatPe CEO Suhail Sameer steps down.

- Koladiya sues Grover to get his shares back.

- Grover's second startup raises seed round.

- BharatPe acquires NBFC Trillion Loans.

- BharatPe's another co-founder Shashvat Nakrani sues Grover.

- I was the first to report an update on EOW Delhi's investigation in Grover vs BharatPe case

- Grover asked to submit title deeds of his Gurgaon flat to travel to the US.