February 07, 2024
BharatPe, a prominent fintech company, has received a new notice from the Ministry of Corporate Affairs (MCA), requesting comprehensive details about its operations and seeking information on legal actions taken against co-founder Ashneer Grover. This notice also raises queries related to the findings in a status report submitted by the Delhi Police’s Economic Offences Wing (EOW), which investigated allegations of financial irregularities within the company.
The News:
The notice falls under Section 206 of the Companies Act, empowering the MCA to request information and inspect company books as part of its regulatory oversight. BharatPe, confirming the receipt of the notice, clarified that it is connected to an inquiry initiated in 2022, and the company is fully cooperative in providing the necessary information to the authorities.
This development unfolds against the backdrop of increasing government and regulatory scrutiny of fintech firms, particularly focusing on compliance and internal governance. Recently, the Reserve Bank of India (RBI) directed Paytm’s payments bank unit to halt accepting deposits and offering banking services after February 29, citing various violations, including Know Your Customer (KYC) guidelines.
BharatPe has been navigating legal disputes, notably with co-founder Ashneer Grover and his wife, Madhuri Jain. The company filed a civil suit against Grover and his family members in December 2022, alleging embezzlement of funds. The Delhi Police’s EOW had filed an FIR against Grover and others last year, prompting regulatory attention.
The Impact:
In a bid to address these legal challenges, Grover and his wife approached the Delhi High Court seeking the quashing of a Look Out Circular (LOC) issued against them in connection with the investigation. The court has directed the authorities to consider their application for permission to travel abroad.
