Financial Misconduct Unearthed
The Economic Offence Wing (EOW) of the Delhi Police has disclosed that eight human resource firms linked to Madhuri Jain, the former director of controls at BharatPe, were responsible for embezzling a Rs 7.6 crore from the fintech giant. This revelation has stirred a hornet’s nest, given Madhuri Jain is the wife of Ashneer Grover, the former co-founder of BharatPe.
Firms Involved and Their Deceptive Tactics
The EOW’s investigation pinpointed eight firms allegedly involved in the financial misconduct. These companies, Vardhaman Marketing, Impulse Marketing, Vista Services, Evolve Bizserve, Team Source, Team Works, True Works Co., and Vikash Enterprises (Team Plus Services), are all purportedly connected to Madhuri Jain and her close relatives, including her father, Suresh Jain, and brother Shwetank Jain.
According to the police report, these companies were established solely for the purpose of siphoning off funds from BharatPe. The deceptive strategy involved creating false invoices for HR services, which were made out to BharatPe. The funds were then redirected through self-cash withdrawals or under the names of individuals and companies, including Suresh Jain, Madhuri Jain, Manju Goyal, Shivalik Fabrics, and Ishu Fabrics, among others.
Orchestrating the Scheme
The modus operandi, as revealed by the investigation, indicates a well-orchestrated plan. The first six firms on the list had credit entries exclusively from BharatPe in their bank accounts, while debit entries were in the form of self-cash withdrawals or under the names of the alleged individuals and companies. Madhuri Jain allegedly expedited payment processes to these HR consultants, manipulating the company’s account branch for wrongful gains.
Exploiting Recruitment for Illicit Gains
The police report further exposes the involvement of Madhuri Jain in obtaining crucial information about recruited candidates. She then shared this information with her father and brother. These candidates, either hired through personal connections or industry recommendations, were then shown as being hired through the implicated consulting firms. Subsequently, these firms charged substantial commissions for the recruitment services provided to BharatPe.
Unraveling the Bogus Invoices
As part of the investigation, the police reviewed invoices where the HR firms used a specific HSIN code. As identified by the Goods and Services Tax Department, this code is intended for permanent placement agencies and executive search services. Shockingly, the proprietors of these HR firms failed to furnish any proof of work done against these invoices, adding weight to the allegations of financial misconduct.
Existence of Non-Existing/Fake Vendors
The Delhi Police further uncovered a case involving 33 non-existing or fake vendors. Later investigation found out that the addresses of 23 of these vendors were improper and untraceable. While this aspect of the investigation is still in its initial stages, it raises questions about the depth and extent of the financial irregularities within BharatPe.
Fallout from Internal Governance Review
The scandal comes on the heels of BharatPe’s internal governance review in March 2022, which led to the dismissal of Ashneer Grover as serious issues were unearthed. The review exposed the malpractice involving fake vendors and improprieties in the recruitment process. Madhuri Jain also faced the axe soon after the review report was submitted to the board.
BharatPe has filed a criminal case with the Delhi EOW against Ashneer Grover and his family members in December 2022. The legal implications of this financial scandal are expected to reverberate across the fintech sector, highlighting the importance of robust governance and financial oversight within organizations.