By Salman SH

Even as BharatPe co-founder Ashneer Grover has filed an emergency plea before the Singapore International Arbitration Centre (SIAC) seeking to quash the company’s investigation into an alleged financial fraud and mishandling of company funds, the two parties are understood to be moving closer to an out-of-court settlement. Grover will likely seek indemnity for many future liabilities while selling his stake back to the company.

Grover, who owns around 9.5% of shares in BharatPe, had reportedly asked the board to buy out his shareholding for Rs 4,000 crore in cash. Grover is also exploring options with external investors to buy out his stake, according to multiple news reports.

In his pleas before the SIAC, Grover said the “review committee” formed by the BharatPe board earlier this month, to look into the allegations of financial fraud, was violative of the terms approved under the shareholder’s agreement (SHA).

FE has reviewed a copy of the plea document submitted before the arbitration court.

“The Review Committee which is constituted in violation of the terms of the SHA, continues to act to the detriment of the Claimant. The Claimant stands to suffer extreme prejudice if the operation of the Review Committee is not prevented and stands to suffer irreparable harm and damage,” the plea before the SIA Court, read.

The plea also quoted various clauses under the SHA and the articles of association (AoA) between Grover and the company as the primary basis to strike down the independent committee appointed by the board. In addition, it sought an order directing the BharatPe board “not to rely on the reports delivered by the Review Committee in its current form and constitution…”.

Grover also sought the SIAC’s intervention to keep in abeyance the appointment of Suhail Sameer as director asking he be restrained from discharging charging any functions as director of the company, pending the arbitration.

Grover’s decision to move the Singapore court comes after a fight ensued between the cofounder and the board in January. Earlier this month, the BharatPe board appointed Alvarez and Marsal and PwC to conduct an independent review of management practices and the company’s books.

A preliminary report of the investigation prepared by Alvarez and Marsal and PwC, which indicted Grover and his wife Madhuri Jain (controller of finance) of committing financial fraud was, however, leaked to the media. The report outlined two instances of financial transactions approved by Jain using invoices that were made to “non-existent” vendors.

Prior to this, Grover said he would be taking a voluntary leave of absence from BharatPe till the March end. The board versus Grover saga gained media attention after an alleged audio recording of Grover surfaced on Twitter, in which the co-founder of the $3-billion company can be heard hurling verbal abuses at an employee of Kotak Wealth Management. In the recording, Grover is believed to have issued death threats to employees and threats of legal action over the bank’s inability to secure financing for the IPO of Nykaa.