Bengaluru & New Delhi: BharatPe’s chief executive Suhail Sameer told employees that findings of an ongoing governance review of the Delhi-based firm will be shared with the Board in a couple of weeks while assuring them that the fintech firm has sufficient funds to tide over the crisis, in a letter on Friday morning reviewed by ET.

He also said that the company is “under constant scrutiny and spotlight” and “what is being written is nothing but unsubstantiated rumours,” in an attempt to assuage widespread concerns amongst the company’s staff.

Sameer’s outreach to colleagues comes amid mounting tension between cofounder Ashneer Grover and the company’s board.

ET had reported
on February 4 that Grover had written to BharatPe’s board demanding Sameer’s ouster from the company’s board of directors indicating the growing chasm between the top management of the fintech company and its embattled cofounder.
(Link: https://economictimes.indiatimes.com/tech/startups/breaking-ashneer-grover-seeks-removal-of-ceo-suhail-sameer-from-bharatpes-board/articleshow/89340758.cms)

“Let me talk about the elephant in the room first – governance review being carried out by well-known and reputed external firms… Based on some internal complaints, we decided to do a full audit of our governance processes. While many of the findings of the review are pretty standard for a fast growth company of our size, there are a couple of more serious allegations, which the review is still substantiating,” Sameer wrote in the internal memo.

“Nothing which can’t be corrected going forward, and none of it has any bearing on the medium to long term health of the business. We expect the review partners (consultants) to share an interim report with the Board in a couple of weeks,” reassured Sameer to employees.

Sameer also called for employee trust, as the corporate battle between BharatPe’s board and cofounder Grover has left employees with a sense of ‘uncertainty’ on the future prospects of the company.

“I would definitely share a summary of findings (and more importantly, what we need to do differently) with you. Meanwhile, I would just request all of you to keep your trust on the Board of BharalPe, which comprises some of the best investors in the world, and veterans of the Indian Banking Industry. Whatever the Board will decide, will be beyond doubt, in the best interests of our employees, our merchants and our consumers,” he wrote.

Also read: The new rage in startup town (Link: https://economictimes.indiatimes.com/tech/startups/the-new-rage-in-startup-town/articleshow/88917006.cms)


Calming fears

ET had reported on January 16 about the toxic work culture which continued to plague BharatPe employees.

In his internal memo, on Friday, Sameer added that the company continued to process an annualised payment value (TPV) of $16 billion in December. He also added that BharatPe’s ‘buy-now-pay-later’ (BNPL) product, postpe, launched last year, also hit annualised TPV of Rs 500 crore.

“In terms of fuel, we have huge amounts of cash in the bank to keep building from here. We have $500 million in the bank (including $100 million that we have invested in Unity small finance bank). To put this in context, we have only spent $130 million to build what we have built so far at BharatPe. In a nutshell, we have 4x (four-times) the money in the bank than what we have spent so far to build BharatPe in the last 3 years,” said Sameer about the financial health of the company.

Sameer also added that BharatPe continues to get in-bound conversation requests from new investors, despite the incidents that have unfolded.

“All our existing investors continue to back us. And while the press may say as it sees fit, we are still getting 2-3 new inbound conversation requests every week from Funds looking to invest in us. While we don’t need to raise capital for a foreseeable future, it is great to know that both existing investors as well as potential new ones are keen to further support us, if we need the capital,” added Sameer.

Investigation heats up

ET first reported on February 11 that BharatPe’s head of controls, Madhuri Jain had written to independent consultant Alvarez and Marsal (A&M) questioning the internal probe at BharatPe and inquiring about the recent media leaks. BharatPe’s board members including Sameer were marked on the memo.
(Link: https://economictimes.indiatimes.com/tech/startups/bharatpes-madhuri-jain-may-sue-auditor-over-leaked-report/articleshow/89488281.cms)

Jain’s letter to A&M also said that she was considering legal action against the firm and has demanded an internal investigation on how the contents of the probe undertaken by A&M were allegedly ‘leaked’.

Further, Jain said that the fact that the findings of the report were leaked to the media makes her “firmly believe” that the “enquiry” was aimed to solely “tarnish” her reputation.

Late last month, BharatPe’s board had brought in independent consultant A&M to conduct a probe into the internal ‘governance’ practices at the fintech firm.

A&M’s initial investigation showed that Jain and other family members were allegedly involved in financial irregularities at BharatPe, ET reported on February 4.
(Link: https://economictimes.indiatimes.com/tech/startups/bharatpes-independent-probe-hints-at-fraudulent-transactions-and-irregular-invoices/articleshow/89337193.cms)

The preliminary findings by A&M, dated January 24, showed that BharatPe pays fees to a number of ‘consultants’ for employees recruited through them. Jain, however, was allegedly in receipt of certain irregular invoices herself, where these employees accepted being hired, but refuted the consultant names on the invoices.

The invoices were also allegedly being created by Shwetank Jain, Jain’s brother, the report added.