BharatPe founders’ fight out in the open, Grover calls for sacking CEO, Nakrani says no

A day after Ashneer Grover, an embattled co-founder of BharatPe, had sought removal of CEO Suhail Sameer from the board, the fintech startup’s other founder, Shashvat Nakrani, has thrown his weight behind the CEO, saying that the official continues to enjoy his confidence. 

In a move that is expected to complicate Mr Grover’s pursuit to oust Mr Sameer as both the founders need to consent jointly to remove the CEO. Mr Nakrani has asserted that he himself has not given any consent or demand for such removal, and that the CEO continues to enjoy his support. 

Legal experts contend that the CEO cannot be removed from the board on the sole demand of Mr Grover, and any such removal can only be done jointly by both the co-founders. Lawyers have also confirmed that if the CEO is a nominee of both the founders, then one founder’s unilateral withdrawal is not valid under the law. 

According to the company’s Articles of Association (clauses 91.3 and 91.7), Mr Sameer, the CEO, was jointly nominated by the two founders – Ashneer Grover and Shashvat Nakrani – as the founders’ nominee on the board. 

Experts believe that neither Mr Grover nor Mr Nakrani have an individual right to withdraw the nomination of the CEO from the board, and any removal from the board can only be done jointly by them. 

With Mr Grover recently launching an offensive against the BharatPe investors after facing a probe over alleged fraud, abrasive behaviour and corporate governance issues, the company has said that questioning the integrity of board members and misrepresentation of facts was painful. 

“The (company) board in all its actions has followed due process in the best interest of the company. We would urge that the confidentiality and integrity of the governance review and board meetings is maintained by all,” BharatPe had said in a statement. 

Mr Grover was sent on a three-month leave following allegations of using abusive language against Kotak Mahindra Bank staff and for fraudulent practices. He reportedly claimed that he was “arm-twisted" by the company’s investors into going on leave and that he had lost confidence in CEO Sameer Suhail. 

BharatPe has engaged Alvarez and Marsal and PwC to run a fine toothcomb through its governance practices. Mr Grover has denied all allegations. 

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