BharatPe Co-founder Ashneer Grover: The decision of BharatPe’s board to appoint accounting firm PwC for independent audit is a step towards terminating the services of co-founder and MD Ashneer Grover and his wife Madhuri Jain Grover. Giving this information to Moneycontrol, people associated with this development said that only after the report of one of the four big audit companies, they can be shown the way out.
What is share purchase agreement
A source said, “The share purchase agreement states that the board can terminate the services of Ashneer and Madhuri, but they need a certificate from one of the four big companies to confirm the fraud and hence, PWC has to has been appointed.”
Even though the share purchase agreement is a private document, Moneycontrol has perused BharatPe’s 2021 Articles of Association (AOA) which briefly mentioned the role of one of the top 4 accounting companies in taking such decisions. has gone.
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The report of one of the top 4 companies will be important
The AOA states, “On confirmation of gross negligence or willful wrongful conduct by one of the four large companies having no connection with the company, such founder shall be decided by the Board on a general majority basis,” Based on the report of a company appointed in
Grover raised questions
In an interaction with Moneycontrol last week, Grover had also mentioned that the board is looking to forcefully kick him out of the company. This is the reason why statutory auditor Deloy, who has been auditing BharatPe since 2019, has been kept away from this exercise. However, she will continue to be the Statutory Auditor of the company till 2024.
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In addition, management consultant and risk advisory firm Alvarez and Marsal is conducting a comprehensive governance review of the company. BharatPe did not comment on the store, although it had earlier confirmed that PwC is reviewing the company’s governance.
Such clauses are normal
A compliance lawyer who did not wish to be named said, “Such clauses are very common especially in companies where large investors like Tiger Global invest. If you want to terminate the services of a founder, you need a report from one of the big 4 companies. The board cannot throw anyone out just by being united.”
Grover has denied all allegations
While the situation is at a point where preliminary findings by Alvarez & Marsal point to financial irregularities in the company, Grover has denied all allegations.
Selected screenshots from the initial reviews of Alvarez and Marsal leaked on social media raised questions about irregularities in dealing with vendors and payments to vendors and consultants.
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