BharatPe’s board appointed Alvarez and Marsal (A&M) to conduct a preliminary investigation, which discovered fraudulent transactions such as payments to non-existent vendors and irregularities in invoices generated to substantiate spending.
This comes as the board of directors of BharatPe is exerting immense pressure on the company’s founder, Ashneer Grover, to resign from the fintech startup permanently. Grover is on voluntary leave of absence from the company, in the aftermath of a leaked audio clip in which he is alleged of abusing a Kotak Mahindra Bank official.
There are two key grounds for the claims of financial wrongdoing. The first involves irregularities in recruitment, while the second involves paying non-existent vendors. Ashneer Grover’s wife, Madhuri Grover had been the head of control at BharatPe since its inception, as well as the procurement and administration departments.
According to the findings of an A&M report dated January 24, BharatPe pays recruitment fees to a number of “consultants” for personnel recruited through them. “In five sample cases, the employees have confirmed their date of joining as slated in the vendor invoice. But they have denied being recruited or engaged through the stated consultant or any knowledge of them,” the report said.
The fintech company used to pay HR consultants fees for employees hired through them. According to the investigation, the company was recruiting employees but fraudulently paying a network of staffing firms that had nothing to do with the hiring and appear to be associated with each other as well as Madhuri Grover.
The report also highlights Madhuri Grover, got at least three of these invoices then forwarded them to the company for payment. The invoices were issued by Shwetank Jain, the brother of Madhuri Jain, according to the report. “As per the document, the creator of all these invoices is ‘Shwetank Jain’. We understand from public domain sources that the brother of Madhuri Jain is ‘Shwetank Jain’. We noted invoices of three other vendors related to recruitment expenses. These have the same commonalities as mentioned above and all have the ‘author’ in document properties as ‘Shwetank Jain’,” read the preliminary findings of A&M.
The invoices for the fees paid to these consultants were reviewed by A&M. Employees acknowledged their date of joining as specified on the vendor invoice. However, they denied having been recruited through the listed consultants or having any knowledge of them. Furthermore, the companies involved had patterns including similar email addresses, physical addresses, formats, and bank branches. And, perhaps most importantly, they were all from Panipat. Madhuri Grover is a Panipat native, according to the report. Based on an analysis of only two of the vendors, BharatPe spent close to Rs 4 crore for undelivered services.