BharatPe’s Madhuri Jain writes to Alvarez & Marsal on investigation report leak

A&M’s initial investigation showed that J
ain and other family members were allegedly involved in financial irregularities at BharatPe, ET reported on February 4.

Jain’s letter 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’.

“It is quite surprising that the report which has been made available to the media is neither available with the company nor has been provided to me,” said Jain in the letter addressed to Manish Saigal, A&M’s managing director in the country. “Even assuming that such a report does exist, it is common practice that where there is a report making allegations or casting aspersions against any individual, the identity of such an individual is kept confidential.”

Also read:
BharatPe CEO says audit in process, urges employees to trust the board for future action

Interestingly, in her letter to A&M, she said 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, and that it is a “complete eye wash.” The letter was also marked to all the board members of BharatPe. Jain is currently on leave from the company. Grover too is on leave till the end of March.

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Jain and BharatPe cofounder Ashneer Grover did not respond to calls or messages. BharatPe and A&M did not respond to ET’s queries.

She questioned the report’s intent in the context of the widely available excerpts.

“Clearly, the excerpts of the alleged report freely available in the media show that your organisation has not even followed these basic rules of confidentiality and ethics,” Jain wrote. “It is clear to me that the report has been leaked to the media with a malicious intent.”

Lens on Governance

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

Last week, preliminary findings of the internal investigation undertaken by BharatPe through independent consultant A&M showed that BharatPe pays recruitment fees to a number of ‘consultants’ for employees recruited through them. However, in five of these cases, while employees confirmed their dates of joining as mentioned in the vendor invoices, they denied being recruited by the ‘consultant’ mentioned in the invoices. The preliminary findings were dated January 24.

Further, the initial findings said BharatPe’s controls head Jain was allegedly in receipt of at least three of these invoices herself. The invoices were allegedly created by Shwetank Jain, Jain’s brother, the report added.

The findings also mentioned that BharatPe was also probed last year by the Directorate General of GST Intelligence (DGGI) on alleged financial irregularities surrounding payments made to vendors. Here, Jain’s brother-in-law ‘Deepak Jagdishram Gupta’ allegedly owned up in his reply to DGGI that he was responsible for the procurements made to vendors, and pleaded with the authorities to not send a ‘show cause’ notice, the preliminary findings said.

“We have come to know that our vendors, as informed by the DGGI officers, do not exist or never operated at their principal place of business. We do not want a show cause notice (SCN) from the department on this matter and request you to waive the SCN,” Gupta reportedly told the DGGI.

Considering Legal Action

In her letter, Jain has said she has the right to take legal action against the consulting firm.

“I reserve all my legal rights, in civil and criminal law, to take appropriate legal action at your risk, cost and consequence for your conduct which has caused irreparable harm to my reputation and that of my family,” said Jain in her mail to A&M.

Last week, ET reported that Grover had
hired New Delhi-based law firm Karanjawala & Co to take legal advice amid mounting pressure on him from the board to leave the fintech he helped found. ET also reported that Grover had
written to BharatPe’s board asking them to remove current chief executive Suhail Sameer from the board of directors. BharatPe Cofounder Shashvat Nakrani later issued a statement saying he backs Sameer’s nomination on the board.

In his first interaction since an alleged expletive-laden audio clip became public, Grover told ET that
he would participate in the probe as long as it was in accordance with the law.

“I’m happy to participate in anything, as long as it is fair and as per Indian laws. Anything 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,” Grover had then said.

Correction: An earlier version of the report said Ashneer Grover was named in initial findings of the A&M report. He has denied this. We’ve made the change.