No relief for Bharatpe co-founder Grover
The order said Grover had not established valid right under SHA or law for such relief
NEW DELHI: Bharatpe co-founder and managing director Ashneer Grover failed to secure emergency relief from the Singapore International Arbitration Centre (SIAC), allowing a company investigation into alleged financial irregularities and governance lapses at the fintech to continue, a person with direct knowledge of the matter said.
Excerpts of the order passed on February 25 said Grover had not established valid right under the shareholder agreement (SHA) or general law for such relief. Queries sent to Grover and a spokesperson for Bharatpe were not answered immediately.
Bharatpe constituted a review committee in January to examine alleged financial irregularities and governance lapses at the three-year-old fintech firm. The committee will rely on the findings of thirdparty investigators Alvarez & Marsal and PWC.
Grover, on February 8, filed an application for emergency relief with SIAC seeking emergency relief before the constitution of the tribunal. Grover feared that the review committee was not conducting a genuine governance review, was acting in haste and constituted with the sole motive of depriving him of his shareholding.
SIAC, in the order, said the review committee was formed a month back and has still not reached a conclusion on whether Grover is guilty of misconduct and gross negligence, and no action has been taken against him. This would, to a large extent, belie the claimant’s apprehension of the review committee acting in haste, SIAC held.
The SIAC said whether the preliminary investigation’s conclusion is justifiable or not will be considered by the Arbitral Tribunal in due course. “In any event, the working of the review committee cannot have a direct prejudicial impact on the claimant (Grover) and his contractual rights under the SHA,” the person said, citing the order. In his February 8 plea, Grover claimed the constitution of the review committee by Bharatpe “is in breach of the SHA and Articles of Association and thus illegal.”
Grover alleged that despite numerous representations/ objections, Bharatpe deliberately kept the review and assessment by the review committee an opaque process and gave him no chance to present his case. “The review committee, which is constituted in violation of the terms of the SHA, continues to act to the detriment of the claimant (Grover). 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,” Grover said in the plea.
In his plea, he sought that the present review panel should be dissolved, and a new ‘lawful committee’ should be constituted to assess and conduct an all-encompassing review.
“The order says if the dissolution of the review committee is ordered at the stage of emergency relief, it will tantamount to granting final relief in favour of Grover even before an arbitral tribunal is constituted. This is impermissible,” the person cited above said.