BharatPe sacks Madhuri Jain on funds misuse charge; cancels her Esops

Bengaluru: BharatPe has fired cofounder Madhuri Jain on charges of ‘misappropriation of funds’, two people aware of the matter told ET.

Jain’s stock options have also been cancelled, the people said.

Jain, wife of BharatPe cofounder Ashneer Grover, had overseen finances at the $2.8 billion company since October 2018.


She was also named in a preliminary investigation by professional services firm Alvarez & Marsal (A&M) that linked her to alleged financial irregularities at the startup.

“It seems that the company has found certain financial irregularities in its books and has strong proof on funds being ‘used’ for personal purchases…This is also linked to the ongoing audit and the final copy has not yet been tabled in front of the board,” said one of the people.

BharatPe also confirmed that Jain’s employment had been terminated.

“As per your query, we can confirm that the services of Madhuri Jain Grover have been terminated in accordance with the terms of her employment agreement,” a spokesperson for the fintech firm said.

Jain was put on ‘mandatory leave’ on January 20.

BharatPe wrote to Jain about the termination, effective immediately, on February 22.

“The interesting bit here is that the company is not treating her as key managerial personnel; hence they have taken this call of firing her immediately – before the final report is tabled for the board’s review,” the second person said.

Messages to Grover remained unanswered. Jain declined to comment.


Jain also posted videos of parties at BharatPe’s office in a Twitter post on Wednesday, alleging misconduct and taking a dig at chief executive Suhail Sameer and group product head Bhavik Koladiya. In a series of tweets, she also termed BharatPe’s all-male board ‘chauvinistic’.

Curious case
ET reported on February 18 that Jain had written to BharatPe’s board on February 10 denying that she had resigned from the company.

In her letter, Jain also said the “alleged” resignation was “rather astonishing” and “defies” every known norm of “corporate governance and propriety”.

“Neither did I have any information about the same (alleged resignation), nor have I tendered any such resignation,” she said, terming the ‘governance review’ a ‘roving enquiry’ and that she had been used as a ‘pawn’ in a fight among shareholders.

Jain also said she was considering legal action against BharatPe.

ET has learnt Grover had offered her resignation at a board meeting on January 19, but that he had taken back that decision immediately, calling it ‘spontaneous’.

Grover had mentioned to BharatPe’s board that the final decision on Jain’s resignation would be decided after his return to the company in April. Grover has been on ‘voluntary’ leave from the startup from January 19.

BharatPe vs Jain
On February 4, ET reported that A&M had in its initial probe findings linked Jain, her brother Shwetank Jain and brother-in-law Deepak Jagdishram Gupta,to financial irregularities at the company.

According to the findings of the report dated January 24, BharatPe paid recruitment fees to a number of ‘consultants’ for employees recruited on their behalf.

“In five sample cases, the employees have confirmed their date of joining as slated in the vendor invoice. But they have denied being recruited or engaged through the stated consultant or any knowledge of them,” the report, which ET had reviewed, showed.

Jain had received at least three of these invoices and forwarded them to the company for payments. The invoices were created by Shwetank Jain, according to the A&M report.

In October last year, the Directorate General of GST Intelligence (DGGI) had undertaken a search operation at BharatPe’s headquarters, which allegedly revealed invoices from non-existent vendors.

Gupta had then taken responsibility for procurements made to vendors in a letter to DGGI later.