Recently there was a dramatic turn in the case of BharatPe. BharatPe’s board chairman Rajnish Kumar sharply criticized the company’s co-founder Ashneer Grover. Rajnish Kumar has been the chairman of the country’s largest bank SBI. He said that Grover should have shown maturity in the whole matter. He also said that Grover wants to prove that the corporate governance investigation in BharatPe is biased against him.
Kumar had said in an exclusive conversation with Moneycontrol on February 23, “I agree that Ashneer should have shown maturity (in the BharatPe controversy)….Ashneer’s entire strategy is to prove that the Governance Review is biased against them.” He had also said that the board was ready to take action against him if the audit report found a governance issue.
BharatPe is a payment company. It allows shopkeepers to receive payments through QR codes. This issue related to the company is related to the violation of corporate governance. Grover and the company’s board are at loggerheads over allegations of corporate governance violations. When the matter started, Grover was sent on forced leave. The board also asked his wife Madhuri Jain Grover to go on leave. But, the matter does not end there. The matter started when an audio clip surfaced. In this, Grover is heard abusing a bank employee. But, soon this matter turned into a big issue related to corporate governance.
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A serious case of corporate governance violation has come to the fore in BharatPe. These include payments to some consultants through fake invoices. Consultants have also come to know about some suspicious payments. Grover wrote a letter to BharatPe’s parent company Resilient Innovations on February 22. It was said that the company’s second co-founder Bhavik Koladia had called him to meet him at a place. He was not informed about the agenda of the meeting. He had also claimed that Kumar was also with him when he received the phone call. He accused Kumar of biased and prejudiced against him and Koladia of being rude. He said that he has the right to take appropriate legal steps.
Kumar has said that Grover’s letter will not have any impact on the company and its board. The board is ready to take action against them. While the chairman of BharatPe has assured that the company will be able to come out of the crisis, the allegations and counter-allegations between the board and Ashneer indicate that there are deeper issues with the company.
Right now the picture is not clear regarding the facts related to this issue. Both sides have their own arguments. But it is quite clear that BharatPe will have to rectify the functioning of the company at the earliest. The settlement of this issue is very important for the interests of PMC Bank. The settlement of this matter is also necessary for the depositors of PMC Bank, who are still concerned about the safety of their money. BharatPe and Centrum are the promoters of Unity Small Finance Bank. PMC Bank has merged with Unity Small Finance Bank.
The PMC Bank Crisis itself is the result of years of continuing fraud and corporate governance violations. Saving PMC Bank (from sinking) bank has a good track record and strong corporate governance structure. Only then will the confidence of the customers of PMC Bank be restored. Centrum has said that the issues related to BharatPe will not affect Unity Small Finance Bank. But, this assurance is not enough. BharatPe needs to keep itself clean.
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