The Economic Offences Wing’s investigation into the alleged fraud at BharatPe has found a host of unexplained payments made to allegedly fake HR consultancies by former cofounder Ashneer Grover, his wife and the company’s former head of controls Madhuri Jain Grover as well as Madhuri Jain’s family members.
The accused are alleged to have used backdated invoices to syphon funds from BharatPe’s accounts towards payments of commissions for recruitment work, as per a status report filed by the EOW in the Delhi High Court.
Inc42 has reviewed a copy of the status report, which shows that EOW’s investigation into BharatPe’s complaint of fraud has two major parts, totalling over INR 81 Cr:
Payments to allegedly fake HR consultancies to the tune of INR 7.6 Cr
Payment of INR 1.66 Cr as penalty to GST authorities and alleged embezzlement of INR 71.76 Cr via fictitious transactions
The total amount alleged to have been involved in these transactions could be well over INR 81 Cr as the EOW probe is currently still ongoing.
It must be noted that this is the first time that the EOW has mentioned details of separate bank transfers totalling over INR 56 Cr involving Madhuri Jain Grover and her family members, as well as Ashneer Grover and his family.
The status report says: “During the course of investigation, scrutiny of A/c No. [redacted] (belonging to alleged Madhuri Jain/Grover) revealed that she got huge amount of approx. INR 5, INR 3 and INR 2 crore from her father Suresh Jain, mother Santosh Jain and brother Shwetank Jain, respectively. Further, scrutiny of account no. [redacted] (belonging to alleged Ashneer Grover) revealed that the petitioner Ashneer Grover transferred a sum of INR 46 crore (approx.) in the account of his father Sh. Ashok Grover from the contemporary period 2019 to 2022. These huge transactions are to be verified and their purpose/end user to be ascertained.”
However, it’s not clear whether the above transactions were in relation to the alleged payments of INR 7.6 Cr+ made to HR consultancies or the alleged embezzlement of INR 71.76 Cr.
See our previous coverage for a detailed look at the allegations against the Grover duo.
Payments To HR Agencies
Beyond this, the status report highlights the following HR consultancies which received payments from BharatPe between 2019 and 2021.
According to the EOW report, the first five of the above allegedly fake HR consultancies submitted invoices mentioning bank account numbers that were not even open at the time of the date of the invoice. This clearly shows that the invoices were created at a later date after the bank accounts were opened.
The EOW states that the HR consultancies or agencies were established only for the purpose of syphoning off funds from BharatPe and for causing “wrongful gain” to the accused. A total of INR 7.6 Cr is said to have been credited to these accounts from BharatPe and no transactions other than the ones originating from BharatPe were found.
Besides this, the registered addresses and proprietorships of all eight HR consultancies are allegedly linked to family members or relatives of Madhuri Jain Grover, as seen in the table above. Jain is also alleged to have received INR 1.50 Cr from accounts linked to the proprietors of eight firms investigated by the EOW.
BharatPe and Ashneer Grover did not respond to questions sent by Inc42 in relation to the EOW probe.
GST Trouble Over Fictitious Transactions
The EOW also goes into detail about the GST penalty paid by BharatPe in relation to invoices to allegedly fake vendors, which were initially allegedly concealed by the Grovers.
A total of 33 fake vendors were alleged to have been involved in these fictitious transactions for which BharatPe claimed a GST input credit and then reversed the input credit and paid the penalty of INR 12.75 Cr towards GST liability, as reported earlier.
A physical verification by the EOW showed that only 10 of the 33 vendors had genuine addresses, while the rest were not contactable. The agency is currently examining the bank accounts of these 10 vendors that have been traced.
In addition to the EOW case, BharatPe has also filed a civil suit with the Delhi High Court seeking INR 88.67 Cr in damages from Ashneer Grover, Madhuri Jain Grover and their family.
In addition, an arbitration claim was filed in the Singapore International Arbitration Centre to claw back restricted shares (1.4%) allotted to Grover.
Allegations Against Ashneer Grover, Madhuri Jain Grover
Here’s a gist of the allegations against Ashneer, Madhuri Jain Grover and others, as per the civil suit, some of which overlap with the EOW criminal case investigation.
Madhuri Jain Grover allegedly approved payments amounting to INR 72 Cr to 30 third-party vendors that did not provide any real services or goods to the company
Madhuri alleged to have approved payments totalling INR 7.6 Cr towards third-party HR consultants who were never used for any recruitment
The Grovers allegedly used a duplex apartment in posh Delhi neighbourhood as their personal residence and expensed it as a company guest house. Nearly INR 52 Lakh paid as rent and security deposit for the house, BharatPe claims
The tenure of Ashneer Grover is alleged to have seen contracts worth INR 48 Lakh contract being awarded to Madhuri Jain Grover’s interior design company for office renovation and decoration
The couple is alleged to invoiced the company for family vacations to the UAE and the United States; the Grovers are said to have billed the company twice for one trip to Thailand to two different vendors
To sum up the current status of the investigation, the EOW told the Delhi High Court that the probe is at its initial stages and replies from various authorities are yet to be examined. It opposed the petition filed by the Grovers for the dismissal of the case and urged the court to dismiss the petition.
The post EOW Uncovers Ashneer Grover, Madhuri Jain’s Alleged Money Trail In INR 81 Cr BharatPe Fraud Probe appeared first on Inc42 Media.