At BharatPe, audit flags recruitment ‘fraud’, ‘non-existing’ distributors being paid

Payments allegedly made to “dubious” recruitment corporations, bills stated to be operating into crores of rupees spent on “non-existing” distributors and “questionable invoices” created to substantiate such spends — these are learnt to be among the many findings made by an unbiased advisory agency into fintech agency BharatPe’s company governance practices.
All of those anomalies, per the audit’s findings, allegedly contain the corporate’s co-founder Ashneer Grover’s spouse and the agency’s head of controls until not too long ago, Madhuri Grover.
The findings of the unbiased audit come weeks after the controversy involving Ashneer and Madhuri Grover erupted within the wake of a leaked audio clip, the place the previous was allegedly hurling abuses at a Kotak Mahindra Bank worker for presumably not with the ability to safe shares of e-commerce firm Nykaa throughout its IPO. Soon after that, Ashneer Grover went on a two month depart of absence.
Amid the controversy, BharatPe commissioned danger advisory agency Alvarez and Marsal (A&M) final month to audit its inner processes and techniques and total company governance. Sources stated A&M concluded an interim investigation into the agency and ready a report on January 24.

However, when contacted, BharatPe claimed its board is but to obtain an interim or ultimate overview of the unbiased audit. A spokesperson stated, “The Board in all its actions has followed due process in the best interest of the company. We would urge that the confidentiality and integrity of the Governance review and board meetings is maintained by all. We request everyone, including the PRESS & Media, to show restraint and allow the governance review to take place in a thorough manner. The Board is yet to receive any interim or final report of the review.”
The board consists of co-founders Ashneer Grover and Shashvat Nakrani, CEO Suhail Sameer, Sequoia India’s Harshjit Sethi, Coatue Management’s Rahul Vijay Kishore, Ribbit Capital’s Meyer Malka, former State Bank of India chairman Rajnish Kumar, and former Union Bank chairman Kewal Handa. Sequoia India, Ribbit Capital and Coatue Management are among the many traders within the loss-making fintech agency, valued at about $3 billion.
Sources near the developments stated that Ashneer Grover, in a letter written to the board on Wednesday, had additionally known as for the elimination of its CEO Suhail Sameer.
A&M’s report, as per sources, testified to the corporate paying charges to HR consultations for recruiting staff, and there being procedural inconsistencies. It claimed that these recruitment corporations had nothing to do with hiring and had a hyperlink to Madhuri Grover.
First, A&M reviewed the invoices of charges paid to those consultants and spoke to the workers that had joined the corporate as per the invoices. The staff confirmed their date of becoming a member of as acknowledged within the vendor bill, however allegedly denied being recruited by way of the acknowledged consultants or any data of them. In not less than three cases, A&M stated it reviewed emails the place Madhuri Grover “directly received” invoices from these corporations and forwarded these to the accounts group for cost.
A&M stated that these corporations look like sole proprietorships reasonably than being established firms. They additionally shared sure commonalities, A&M discovered — they’d comparable electronic mail addresses, bodily addresses and financial institution branches amongst different issues. All these recruitment corporations, barring one, the A&M report stated, had a “Panipat” connection, whereas noting that Madhuri Grover is initially from Panipat. Detailed queries despatched to the Grovers and A&M didn’t elicit a response till publication.
Aside from inconsistencies in funds made to those questionable recruitment corporations, A&M’s probe claims it discovered that over Rs 50 crore was paid to 30 distributors who gave the impression to be “non-existent”.

Sources instructed that in its probe, A&M additionally discovered that in October 2021, the Directorate General of GST Intelligence (DGGI) carried out a search operation at BharatPe’s head workplace and summoned the corporate’s authorised signatory to look earlier than them. It additionally requested the corporate to supply financial institution statements from July 2018 until date reflecting funds made to those distributors.
BharatPe then selected to pay Rs 11 crore in dues together with penalties, per A&M’s report. The danger advisory agency stated it was tough to evaluate why BharatPe was coping with such non-existent distributors and why it determined to settle the matter which resulted within the lack of this Rs 11 crore with none authorized illustration or making efforts to get well the cash from the distributors.
In a letter despatched to the DGGI final yr after its search operation, the corporate communicated to the DGGI that the distributors “do not exist or never operated from their principal place of business”, A&M’s report discovered. This letter was signed by Deepak Jagdishram Gupta, who A&M stated is the brother-in-law of Madhuri Grover. Gupta additionally requested the DGGI to waive off the showcause discover issued to the corporate.