BharatPe too gets a fresh notice, under MCA scanner

BharatPe received a fresh notice from the Ministry of Corporate Affairs, seeking details from the digital payments company about its working and the proceedings it had initiated against cofounder Ashneer Grover, people in the know told ET.

The ministry also asked questions over the findings in a status report filed by the Delhi Police’s Economic Offences Wing, which had investigated allegations of financial irregularities at the company, they said.

Elevate Your Tech Prowess with High-Value Skill Courses

Offering College Course Website
IIT Delhi IITD Certificate Programme in Data Science & Machine Learning Visit
IIM Lucknow IIML Executive Programme in FinTech, Banking & Applied Risk Management Visit
MIT MIT Technology Leadership and Innovation Visit

The company confirmed receipt of the notice and in a reply to ET’s questions, said it was related to an inquiry that started in 2022. The Registrar or Companies, an arm of the ministry, has sought additional information in a letter to the company, a spokesperson said.

In 2022, the MCA had sought information from BharatPe on its internal governance, investment in mutual funds and stock options offered to independent directors including chairman and former State Bank of India chief Rajnish Kumar.

The fresh notice to the company comes amid increasing government and regulatory scrutiny of fintech firms over issues of compliance and internal governance. Last week, the Reserve Bank of India ordered BharatPe rival Paytm’s payments bank unit to stop taking deposits and providing banking services post February 29.

The RoC has issued the notice to BharatPe under Section 206 of the Companies Act, the people said. Under this section, companies must furnish the information sought by the registrar. It also gives the ministry the right to inspect the books of a company or call for an inquiry.

Discover the stories of your interest

BharatPe said the information required is part of the ongoing inquiry that the company had mentioned in its audited results. “We are extending all possible cooperation to the authorities,” the spokesperson said.

BharatPe has also been embroiled in a legal tussle with cofounder Grover and his wife Madhuri Jain, who was the company’s head of controls. In December 2022, the New Delhi-based fintech firm filed a civil suit in the Delhi High Court against Grover and his family members, seeking up to Rs 88.67 crore in damages for alleged embezzlement of funds.

In November, last year, the company sought an injunction from the high court against Grover from divulging “confidential information” relating to the company. It has initiated arbitration in Singapore, seeking to claw back Grover’s restricted (or unvested) shares.

Grover had appeared before the Delhi Police’s Economic Offences Wing in November last year for questioning in the alleged fraud case.

Harry Byrne

Related post