Exclusive | Without freedom, I’m happy being a shareholder, founder: Ashneer Grover

Breaking his silence on the
audio clip controversy that caused him
to go on leave until the end of March, BharatPe co-founder Ashneer Grover told ET in an exclusive interview that the company’s board decided to act as the matter had become “disproportionately big” in the media. He also said certain unnamed detractors—including rival payment firms—were partly responsible for the episode snowballing into a controversy. Grover said he was happy to participate in any investigation as long as it was fair and as per Indian laws.

“As far as my personal wealth is concerned it’s an open book,” he said.

Having come under immense criticism for allegedly abusing and threatening a Kotak Mahindra Bank employee last October, Grover said he wasn’t seeking damages from the bank over the Nykaa IPO financing matter, which was the genesis of the public scandal.

In a detailed chat, the BharatPe cofounder—who is no stranger to controversy—talked about his relationship with the company’s board and investors, and addressed allegations that he helped build a toxic work culture at the firm.

Edited excerpts from the interview.

How is your relationship with the BharatPe board right now? Is there pressure on you to resign, given that an internal investigation is underway?

My relationship with the board is of value creation, value preservation and governance. This issue has been made disproportionately big in the media as part of a conspiracy. Some board members have been forced to react.

In a normal scenario, for any dispute involving an individual, the board does not need to get involved. I have created a business in record time. BharatPe today is worth around $6 billion. Whenever a business becomes that big, and each shareholder’s stake is worth half a billion dollars, the board will obviously act in a manner which it feels is necessary for value preservation.

So, like everyone else on the board, I am also clear that I want to preserve the value that I have built so far. As the dust around this issue settles down—soon, I think—BharatPe’s board and I will have a very amicable conversation and we will all act in a manner which works best for us, individually and collectively.

Will you be stepping down from your executive role at BharatPe soon? Do you fear being fired?

I’m a builder and I like to put my energies into building something. I think anything that happens in the future will only be driven by one thing—whether I have the degree of freedom to build it, and whether it is big enough to consider building. Neither do I have that much clarity nor can anyone give you clarity about the future. I will be wherever there is value creation.

I do not fear anything, and I know how to create value, and will not waste my time in politics or where there is just value preservation. Irrespective of what happens, no one can take it away from me that I created BharatPe from scratch in record time. If I don’t have the same degrees of freedom, I’m equally happy being a shareholder and a founder.

The board is conducting an investigation now. Will you be participating in it and will you be open to disclosing your personal transactions?


In all my previous organisations, you would not see anyone even vaguely say anything which is improper about me. I’m happy to participate in anything, as long as it is fair and is as per Indian laws. Anything which is extrajudicial or if anyone wants to go overboard—I will not be able to participate. I’m very clear as far as my personal wealth is concerned—it’s an open book.

If you are indeed as fair and clean as you say, why the investigation?


I’m not aware of the nature of the investigation and what it is for. [It] is best known to the people who are doing it.

Your wife Madhuri Jain (who is head of controls at BharatPe) has also been sent on leave. Is this true and what is your take on this?


Madhuri is not just my wife, she has been a part of BharatPe since before it raised its first institutional round. But taking someone as just a relative, and not as an active working professional, while painting them in a bad light is something I do not appreciate. Do you ask this to Nykaa, Kotak or the Ambanis? You should ask her this because I cannot answer this question in the same capacity as her husband.

Has the RBI questioned you in relation to Unity Small Finance Bank? Are you also going to step back from your duties at Unity? How does that impact your engagement with the new small bank venture?


I’ve not been approached by the RBI and neither has anyone else at BharatPe. During this period, the Cabinet has cleared the PMC Bank merger with Unity. Why did the Cabinet give the merger a go-ahead? RBI as an institution has a mind of its own, [not] what gets painted by the media.

Earlier this month, Kotak Mahindra Bank said it is planning on taking legal action against you for mistreating their employee, proving the audio clip was genuine. You have since deleted the tweet which said it was fake. Could you tell us why you changed your stand?


My stand does not change. The audio clip is absolutely fake. It was sent to me in an email, I had screenshots of it. Someone claiming to be ‘Unicon Baba’ on Twitter asked me for $240,000 to manage my reputation. I clearly replied to him saying I do not fall for blackmail. I had put this on Twitter, because the audio was put there. Now when the audio was removed, my tweets had no locus standi and therefore were removed. If the person has deleted the initial post your comment doesn’t need to be there. And that is the only reason. I stand by everything I said. The audio is fake.

If the audio was fake, why would Kotak Mahindra Bank say that it is considering legal action against you for mistreating an employee? What are the legal remedies you plan to explore?


I have the utmost respect and love for Kotak. I started my career there and spent seven years with them. A lot of what I know in terms of finance is because of Kotak. As far as Uday Kotak is concerned, he is my hero, and I have grown up and created things thinking that one day I will be seen in the same light as him.

Also Read:
Ashneer Grover praises ‘legend’ Uday Kotak amid legal battle

It is unfortunate that in a conspiracy to malign me, Kotak was unnecessarily brought in.

I’ve written emails to Mr Kotak apologising for the Twitter muck. There is absolutely a good relationship [between us] to the extent that all my banking is still with Kotak. Kotak has continued to have the same set of relationship managers for me, and they’re marked on mails, even today.

What’s the current situation?

I learnt that the relationship manager misrepresented to me the facts and further stonewalled me to prevent me from speaking to his seniors at Kotak. Therefore, to get the financing as promised I sent them a notice. Now the same relationship manager created a different lie that I had misbehaved to protect himself. The matter was closed on November 8 last year, after I replied that I haven’t misbehaved with anyone. Linking the audio to Nykaa’s IPO is the media’s work and everyone has been jumping to conclusions. I have the same relationship manager even now.

So is it safe to say that your legal case with Kotak is closed?


There is no legal case. I sent a notice saying that Kotak has not made good on a promise. They sent a reply. I was seeking financing for the Nykaa IPO. As far as I’m concerned, I will not be seeking any damages from Kotak moving forward. The chapter closed on November 8. And whatever loss has been incurred is my loss. I’ve not received any complaint or FIR on this or any other matter.

There have been several instances in which employees have complained about your rash behaviour and said you crossed the line. Do you think you could have acted better in those situations? And what does it say about the company’s culture?


A company’s culture can never be built by a single individual. I have a cofounder, we appointed a CEO and there are 11 CXOs. We are the only startup in India with 11 CXOs. I haven’t heard a single instance of anyone either coming up to me, the CEO or the board with any complaint against the culture. In fact, I believe we have one of the best cultures. Otherwise, why would 11 CXOs and a CEO join us?

And if a company’s culture was to be driven by one person, they might as well own 100% equity in it.

So why are your current and former employees complaining? Do you think the pressure to chase growth aggressively rubbed them the wrong way?


All this is folklore. I’m a teetotaler. I’m also an introvert by nature, and do not speak that much. Therefore, there will always be a lot of unknowns about me. And people will always have the liberty of creating stories around me because very little is known about my personality.

The culture I’ve created is one of performance. In India, the unfortunate part is that people mistake professional aggression for a personal trait. This makes it easy to infer that the person would be super-aggressive and brash on a personal level as well.

People had the same view about me in Shark Tank. But there’s a set of people who now understand me better and the consistency with which I speak. There’s enough of me out there for people to judge for themselves.

BharatPe’s investors and board have come in for major criticism as they haven’t spoken about corporate governance lapses at the company—be it the case of Bhavik Koladiya (who was charged with financial fraud in the US) or your alleged conduct with employees. Did you step down as CEO last year because of these issues?


The whole board structure has been put by me. I had invited Rajnish Kumar (former chairman of the State Bank of India) and Kewal Handa (ex-Union Bank chairman) as independent directors on the board. When you attack someone, you will attack everything and anything. Detractors of the company are throwing multiple things [at us] to make us react and see if something sticks.

Who are these detractors?


From getting a banking licence to being sponsors of ICC World Cup, it has been a dream run for BharatPe. There are enough people who don’t like it. There are people who are building businesses on payment MDR and they don’t like the fact that we made MDR zero. (Merchant Discount Rate, or MDR, is a fee that payment companies charge merchants for processing transactions.) There are people who have not been able to build a lending business, despite being around for 10 years. We are not perfect but at the same time we are not what is being made of us by the media either.

BharatPe was touted to be in the midst of a fundraise when the audio clip emerged. Has that affected your funding opportunities?


We as a company have close to $500 million as cash, $100 million of which is sitting in Unity SFB as pure cash. I don’t think BharatPe needs to do a fundraise for the next two years. There was no conversation about raising funds in the past 4-6 months either.

I’ve made sure that the company has adequate cash. More importantly, I have ensured that the company never went into cash burn mode.

Do you think BharatePe’s reputation will continue to be affected in light of the controversies?


Hopefully, people will understand that here is an individual under external attack, with certain individuals trying to get even with him for all that he has achieved. At mass, neither the shopkeepers nor normal consumers have any view on this that would cause even a minor dent or a headwind to the business, forget any damage to the brand.

Do you regret anything which has happened over the past month? Looking back, do you think you could have acted differently in any situation?


I think in hindsight, the only thing I should not have done was be vocal about Paytm’s IPO. Even though the numbers on the stock market are reflecting that, it was still not my place to speak. Other than that, I would not change a thing. I was being quiet because I didn’t want to be drawn into a media trial, and to let this targeted attack on me subside.

I’m not an expert in handling media—it is one of my weakest points. I did the right thing by being quiet about it. I’m not saying I’m perfect, there is scope to improve, but I’m not the devil that the media is portraying me as.