07 March 2024 – Ashneer Grover, co-founder and former managing director of BharatPe, has written to RBI Governor Shaktikanta Das, seeking an investigation into the shareholding practices of the QR code-based digital payments and loans provider. Grover alleges intentional deception in adding Bhavik Koladiya, previously convicted of wire fraud, to the company’s cap table after obtaining licenses. The letter raises questions about regulatory compliance, particularly regarding BharatPe’s eligibility for a stake in Unity Small Finance Bank and Liquiloans.
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Details of the Allegations:
- Grover claims BharatPe deceived the regulator by incorporating Koladiya into the cap table post-license approval.
- The letter questions the duration of holding Koladiya’s shares before reintegration into the company after RBI approvals.
- Grover highlights the transfer of 11.7% of shares to Koladiya, valued at Rs 600 crore, without charge, as per annual reports.
- Warehousing, the practice of holding shares before acquiring a significant stake, is a focal point of the investigation.
If proven, Grover demands license revocation, a ban on the board from RBI-regulated entities, and penalties. Venture firms associated with BharatPe could face blacklisting. BharatPe, valued at $2.7 billion, had sought $100 million in fresh equity and Rs 500 crore in debt.
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Conclusion:
Ashneer Grover’s letter to RBI intensifies the scrutiny of BharatPe’s corporate governance. The allegations, if substantiated, may lead to significant repercussions for the fintech startup, impacting licenses, board positions, and investor relations. The unfolding developments underscore the critical intersection of regulatory compliance and ethical business practices in India’s burgeoning fintech landscape.
