BharatPe Managing Director Ashneer Grover’s troubles are increasing continuously. Shocking things have come to light in the investigation of risk advisory firm Alvarez & Marshall (A&M). BharatPe is conducting a comprehensive investigation into the company’s practices, accounting, approval process, expenses and hiring. For this the services of consultancy firm PwC are also being taken.
On the other hand, the Reserve Bank of India (RBI) is also exploring the compliance of corporate governance in BharatPe. This is because BharatPe is one of the promoters of Unity Small Finance Bank (Unity SFB). RBI grants license to the bank only when its promoter is found fit and proper. He also needs to have a good corporate governance record.
Alvarez & Marshall (A&M) submitted its report to the board of BharatPe on 24 January. In this, information about financial fraud has been given. It has been pointed out that there are two main grounds for this. The first of these is related to the scam related to recruitment. The second is related to payments to vendors who are not actually there. Actually, Madhuri Grover, wife of Ashneer Growth, was handling a big responsibility in the company since the inception of BharatPe. She was the head of the Procurement and Administration Department.
Bharatpe used to recruit employees through HR consultants. For this he used to pay fees to HR consultants. It has been found in the investigation that the company itself used to recruit staff. But for this the fee was paid to many staffing companies, which had nothing to do with this recruitment. It is learned that these companies were linked with each other and had a connection with Madhuri Grover.
A&M has looked into invoices of fees paid to recruitment companies. Employees who have joined BharatPe have confirmed the joining date given in the invoice. However, these employees have denied being recruited through hiring firms that BharatPe has paid for. He has also said that he has no information about these firms.
In at least three cases, it has been found that Madhuri Grover took these invoices from the vendor. Then, these were forwarded to the account team for payment. These companies were mostly sole proprietorships. These invoices were prepared by Shwetank Jain, who is Madhuri’s brother. There are many similarities between these recruitment firms. Their email address, physical address, formats, bank branches etc. are same. The most important thing is that all of them are in Panipat. It is also learned that Madhuri is actually a resident of Panipat.
Investigation has found that only two vendors were paid around Rs 4 crore by BharatPe for work which was never done. It has also come to the notice that about Rs 51 crore has been paid to 30 vendors who do not exist. The payments made to these vendors were caught by the Director General of GST Intelligence (DGGI). Instead of challenging the demand for service tax, BharatPe paid arrears of Rs 11 crore along with penalty.
These discrepancies were detected in a DGCI search on October 21, 2021, just 10 days before Ashneer Grover’s legal battle with Kotak Wealth Management began. The DGGI had sent a notice on November 1 to the officer of the company on charges of tax evasion. The company had sent a reply to the notice to DGGI on November 11. This letter had the signature of Deepak Jagadishram. The A&M report said that Gupta, who was responsible for the procurement, is Madhuri’s brother-in-law.
In preliminary investigation, it has been found that the total expenditure associated with 30 vendors was Rs 53.25 crore. A&M has advised BharatPe’s board to conduct a comprehensive investigation. This would explain why the company was making payments to vendors who do not exist.
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