New Delhi: BharatPe, a prominent player in India’s fintech sector, has come under the spotlight once again as the Ministry of Corporate Affairs (MCA) issues a fresh notice seeking details about its operations and actions against co-founder Ashneer Grover. The notice, under Section 206 of the Companies Act, follows inquiries into alleged financial irregularities within the company.
Ministry Seeks Information On Operations And Legal Actions
According to a report by The Economic Times (ET), the Ministry of Corporate Affairs has sent a notice to BharatPe, requesting information on its operations and legal actions taken against co-founder Ashneer Grover.
The notice also queries findings from a status report submitted by the Delhi Police’s Economic Offences Wing (EOW), which investigated allegations of financial irregularities within the company.
BharatPe Confirms Receipt Of Notice
BharatPe confirmed the receipt of the notice and stated that it pertains to an inquiry initiated in 2022. The Registrar of Companies, operating under the ministry, has sought additional information through a formal letter.
The company emphasized that the requested information is part of an ongoing inquiry mentioned in its audited results and assured cooperation with the authorities.
Regulatory Scrutiny On Fintech Firms
This development occurs amidst increasing government and regulatory scrutiny of fintech firms concerning compliance and internal governance. Recently, the Reserve Bank of India (RBI) directed Paytm’s payments bank unit to cease certain services due to violations of various norms, including KYC guidelines.
Legal Disputes With Co-founder
BharatPe has been embroiled in legal disputes with co-founder Ashneer Grover and his wife, Madhuri Jain. The company filed a civil suit against Grover and his family members in December 2022, alleging embezzlement of funds. Last year, the EOW filed an FIR against Grover and others for alleged fraud after a complaint by BharatPe.
Court Proceedings And Resignations
Grover and his wife approached the Delhi High Court seeking the quashing of a Look Out Circular (LOC) issued against them. The court directed authorities to consider their application for permission to travel abroad.
Jain, formerly head of controls at BharatPe, was terminated in 2022 following a forensic audit revealing irregularities, while Grover resigned as CEO in March 2022 amidst these controversies.