The leaked audio clip, which first emerged online on Wednesday through anonymous social media handles, features a conversation in which Grover repeatedly abuses and threatens to get the Kotak employee killed in a so-called police encounter, or extra-judicial murder, for his failure in securing allocation of funding for Nykaa IPO.
Grover, who initially said through his Twitter and LinkedIn accounts that the clip was fake, has subsequently deleted that claim. BharatPe has not denied that the audio is genuine, choosing instead to say that it would not comment on the matter and wouldn’t like to respond to “baseless social media allegations”. Kotak has not commented about the incident. Grover and the Kotak employees mentioned in the clip did not respond to requests for comment.
Mint is unable to independently verify the authenticity of the clip. But two people close to the developments and in a position to know, said the conversation featured in the circulating clip did happen. They asked not to be named for fear that business ties might be hampered. Our reporting has also been able to tie together the chain of events and past relationships that led to the flashpoint.
A joint venture between BharatPe and Centrum Financial Services has been given a license for a small finance bank by the Reserve Bank of India and operates Unity Small Finance Bank. It is expected to take over the troubled Punjab and Maharashtra Cooperative Bank.
Grover is also currently featured in Shark Tank India, a television show in which startups pitch for investments to a panel of investors, called sharks.
Bharat Pe is one of India’s largest digital payments company and counts among its investors Sequoia Capital, Ribbit Capital, Beenext, Coatue, Steadview, Tiger Global and others. In October last year, the company appointed former SBI chairman Rajnish Kumar as the chairman of its board.
“Chill, it’s a FAKE audio”
On 5 January, an anonymous Twitter user named ‘bongo babu’ put out an audio clip in which Grover appears to be abusing and threatening to kill a Kotak bank employee over failing to get an allotment during Nykaa’s Initial Public Offering (IPO).
The audio clip titled “how rich founders treat poor bank employees”, was allegedly a conversation involving Grover, his wife Madhuri Jain and an employee of Kotak Wealth Management.
The leaked clip led to a social media backlash and questions about the prevailing work culture at BharatPe. In response to the backlash, on Thursday morning, Grover put out a statement on Twitter, claiming that the audio clip circulating on social media is fake.
“Folks. Chill! It’s a FAKE audio by some scamster trying to extort funds (US$ 240K in bitcoins). I refused to buckle. I’ve got more character. And Internet has got enough scamsters,” Grover said on Twitter.
Along with the statement he put out screenshots of an email exchange with an anonymous account named Unicon Baba, which is seen offering marketing services for a fee. But on Friday, Grover deleted the post from his social media handles on Twitter and LinkedIn, without explanation.
Centrum to Kotak
The Kotak employee who is on the receiving end of Grover’s threats and abuse, and can be heard being addressed as Sushruta in the clip by both Grover and his wife, is Sushruta Arora, associate vice president at Kotak Wealth Management, according to the two persons cited above. The Kotak employee being referred to as Rohit in the clip is Rohit Mohan, senior director of the Ultra High Networth Individuals practice at Kotak Mahindra Bank, the persons said.
Both are former employees of Centrum India—with whom BharatPe is in a joint venture for Unity Small Finance Bank. As per their LinkedIn profiles, Mohan joined Kotak in April 2021, whereas Arora joined in June 2021.
Arora and Mohan did not respond to messages via text and LinkedIn. The chief executive of Kotak Weath Management did not respond to an email seeking comment.
Apart from the bank JV, BharatPe and Centrum Group have had a long relationship. BharatPe’s investment portfolio is handled by Centrum Wealth Management.
“Mohan was the one who introduced Grover to Centrum initially. So, when he quit Centrum to join Kotak last year, Grover gave the mandate to Kotak to manage his personal wealth. BharatPe’s money is still managed by Centrum, but Ashneer’s personal wealth is being managed by Kotak now,” the first of the two people quoted above said.
The dispute that’s the subject of the controversial audio clip is a thriving credit facility called IPO financing, in which banks extend loans which can be used to bid for shares in an initial public offering. With a hyperactive IPO market and investors chasing gains upon listing, also called pops, it has emerged as one of the most popular offerings of wealth management firms.
In an interview with CNBC TV18 in July last year, Grover said that he made a Rs150 crore personal application in the Zomato IPO via the NII (non-institutional investor) segment through Kotak Wealth Management. He was building a pool of $100 million for the Delhivery, Nykaa, and Policybazaar IPOs, he said, adding that he is allocating his personal savings to gain IPO financing leverage and is looking to apply for $15 million-plus in every IPO that comes up in the tech space.
“There is an ongoing dispute between Kotak and Grover over IPO (initial public offering) financing,” said the second of the two persons quoted above. He added that it was not the allocation of shares that Grover is talking about in the audio clip but the allocation of IPO financing money.
A senior industry official, who works closely with Kotak Investment Advisors, explained how IPO financing works.
“Say the IPO is worth Rs1,000 crore, but due to extended interest there is likely to be a bid of Rs5,000 crore. So every investor (small investor) who wants to get their maximum of 2 lakhs (retail individual investors are permitted to apply for an allotment worth not more than Rs2 lakh) needs to put in five such bids. So that even if they get 20% allotment, it will be 2 lakhs. Bankers know this and know that the money will come back. Hence, they go ahead and finance the 9 lakhs out of the 10 lakhs bid because it’s totally safe…so, the investor doesn’t have to put up money and just pay for the interest for those 10 days or so. And, the investor hopes to make that up when the stock opens at a premium.”
While the Rs2 lakh cap is not applicable for HNIs who apply in the NII segment of IPOs, the principle of bidding for more lots to maximise your chances remains the same.
“The higher you bid the higher the chances of IPO allocation. In this case, a large loan was extended which could then be used to bid for Nykaa shares. However, the money was not eventually given at the last moment. Grover is upset with the fact that Kotak promised him the allocation and so he did not check with anybody else…,” he explained.
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