BharatPe interim report in few weeks, CEO allays fears on liquidity position
An interim report on the ongoing governance review at BharatPe will be submitted to the company’s board in a few weeks, BharatPe CEO Suhail Sameer wrote in a communication to employees on Friday. Sameer wrote that there were “a few…serious allegations” of governance failures that were being audited by outside firms.
Sameer also noted in the letter that BharatPe has “huge amounts of cash in the bank to continue building,” adding that the company has $500 million (including the $100 million invested in Unity Small Finance Bank) in the bank, and all existing investors are supporting it. He also wrote that the company has no need to raise capital for the foreseeable future and is getting “2-3 new incoming conversation requests every week” from potential investors.
“While we don’t need to raise capital for the foreseeable future, it’s good to know that existing investors as well as potential new ones are willing to support us should we need capital,” Sameer wrote.
Noting that the governance review was carried out by external firms – Shardul Amarchand Mangaldas, Alvarez & Marsal (A&M) and PwC – Sameer wrote: “Based on some internal complaints, we have decided to conduct a full audit of our governance processes. While many of the findings of the review are fairly commonplace for a rapidly growing company of our size, there are a few more serious allegations, which the review continues to substantiate.”
PwC was asked by the board late last month to investigate things like accounting, approval processes, spending and hiring. As part of this process, PwC involves its forensic team, which may review the findings submitted by A&M.
A&M was appointed by BharatPe through his law firm Shardul Amarchand Mangaldas to look into internal governance issues – specifically assessing whether senior executives were making proper internal disclosures about personal investments and verifying conflicts. Some of A&M’s preliminary findings allegedly implicate Ashneer Grover’s wife and corporate controls manager Madhuri Jain Grover, and noted that payments were allegedly made to “dodgy” recruiting firms with expenses s amounting to millions of rupees spent on “non-existing”. suppliers and “questionable invoices” created to justify these expenses.
An email query sent to BharatPe did not elicit a response. “We expect the review partners (consultants) to share an interim report with the Board in a few weeks,” Sameer wrote.
“In the meantime, I would just like to ask you all to keep your faith in the Board of BharatPe, which includes some of the best investors in the world and veterans of Indian banking. Whatever the Board decides, it will be undoubtedly in the best interest of our employees, merchants and consumers,” he added.