The Delhi High Court on Friday (December 15) rejected an interim application filed by BharatPe cofounder Shashvat Nakrani that sought to restrain the fintech unicorn’s former managing director (MD) Ashneer Grover from selling or alienating the shares that the former sold to him.
A single-judge bench of Justice Sachin Datta dismissed the plea but directed Grover to intimate Nakrani when he decides to sell or transfer the shares in question.
Nakrani claimed that he had transferred his shares to Grover but never received any money for it. However, Grover claimed to have paid for them in cash.
In recap, BharatPe was founded by Nakrani and Bhavik Koladiya in March 2018. Grover joined the company as a third cofounder and board member in July 2018 and purchased 3,192 shares (2,447 from Nakrani and 745 from Koladiya for INR 10 apiece).
In March, Inc42 reported that Grover was supposed to pay INR 24,470 to Nakrani and INR 7,450 to Koladiya. However, Nakrani claimed the former MD is yet to pay for the shares. With time, the 2,447 shares that Nakrani transferred to Grover now translate to 24,470 shares due to share splits and are worth around INR 4 Lakh each.
Appearing for Grover, advocate Giriraj Subramanium argued that Nakrani’s case is based on a complete ‘misreading, misinterpretation and misunderstanding’ of the Sale of Goods Act, 1930.
He noted that the transfer of shares to Grover, and permitting him to join and remain a member of BharatPe for nearly five years, showed that Nakrani not only delivered the shares to the former MD on July 2, 2018 but also never reserved any right of disposal whatsoever.
Subramanium further contended that, in this case, the contract was adhered to in its entirety. He also argued that the share transfer form was duly executed and Grover’s name was entered into the shareholders’ register as per set norms. This makes it evident that the title to the shares has passed to Grover, he submitted.
Incidentally, BharatPe’s other cofounder, Bhavik Koladiya, has also sued Grover over a dispute about the transfer of shares. According to media reports, Koladiya (the largest shareholder in the startup) had to allegedly leave BharatPe as his past conviction in the United States in a credit card fraud case was hindering talks with investors.
As he resigned, Koladiya transferred his shares to Grover, Nakrani and one Mansukhbhai Mohanbhai Nakrani, as well as some other early-stage and angel investors. The consideration for the transfer of the shares was approximately INR 88 Lakh. He has claimed that to date, Grover has not paid the purchase consideration.
In Koladiya’s case, Grover claimed that his wife transferred INR 8 Cr to Koladiya’s wife, a payment which also included the INR 88 Lakh for the shares. However, Grover agreed, in January this year, to not create any third-party interest in the 16,110 BharatPe shares in question and in any rights that accrue to him as a consequence thereof.
Grover’s stake in BharatPe has become a major bone of contention for all parties involved in the nearly two-year-long saga since the former Shark Tank India judge’s acrimonious exit from the fintech unicorn in March 2022.
While Nakrani and Koladiya have claimed they did not receive payment for the stake they sold to the former MD, BharatPe approached the Singapore International Arbitration Centre (SIAC) earlier this year, seeking to claw back Grover’s restricted shareholding in the company.
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