BharatPe co-founder Shashwat Nakrani backs CEO Suhail Sameer amid tussle with Ashneer Grover
New Delhi:
A day after BharatPe co-founder Ashneer Grover sought the removal of CEO Suhail Sameer from the board, another founder of the fintech startup Shashwat Nakrani threw his weight behind the CEO, saying the executives are enjoying his confidence.
In a move expected to complicate Mr. Grover’s effort to remove Sameer, as both founders require joint consent to remove the CEO, Mr. Nakrani insisted that he did such removal himself. and the CEO continues to enjoy his support.
Legal experts argue that the CEO cannot be removed from the board on the sole demand of Ashneer Grover and any such removal can only be done jointly by both the co-founders. The lawyers also affirmed that if the CEO is the nominee of both the founders, then the unilateral withdrawal of one founder is not valid under the law.
When contacted, Mr. Nakrani confirmed that he has not given any consent or demand for the removal of Suhail Sameer from the Board.
Mr. Nakrani said, “I have neither given my consent nor demanded the removal of Suhail Sameer from the board of BharatPe. Such reports are false.”
He added: “I can confirm that I was one of the two joint nominees in the motion for the appointment of Suhail Sameer as BharatPe’s CEO and board member, and he continues to enjoy my support.” As per the company’s Articles of Association (clauses 91.3 and 91.7), CEO Suhail Sameer was jointly nominated by the two founders – Ashneer Grover and Shashwat Nakrani as the nominees of the founders on the board.
Experts are of the view that neither Ashneer Grover nor Shashwat Nakrani have the individual right to withdraw the CEO’s nomination from the board, and any removal from the board can only be done jointly by them.
BharatPe’s board currently consists of nine members – two founders, one joint founder nominee (CEO), four investor nominees, and two professional independent directors (Rajnish Kumar and Kewal Handa).
The current term for the CEO is for five years and may be re-confirmed upon completion.
According to Matthew Chacko, founding partner of Spice Route Legal, the standard venture capital document would give an appointment group the power to remove a director so appointed.
Chacko said, “There are common misconceptions that these are individual powers bestowed on the individual who often exercises these powers – in fact these are often joint powers, exercised after consultation with the group. “
He continued: “The requirement that a group jointly assume the premises of God serves as a powerful check on individual tendencies. Yes – they need to act jointly to remove a director.” Is”.
Quoting the association document, Rishi Anand, partner, DSK Legal, said Article 91.7 provides that a board member can be removed only with the written consent of the shareholder who has nominated such director.
“Therefore, a jointly appointed person can be removed only with joint consent,” said Anand.
With Mr Grover recently launching an offensive against BharatPe investors after he faced probe over alleged fraud, indecent behavior and corporate governance issues, the company on Friday said it was questioning the integrity of the board members and the facts. It was painful to misrepresent.
“The (Company) Board has followed due process in all its actions in the best interest of the Company. We would urge that the confidentiality and integrity of the Governance Review and Board meetings be maintained,” BharatPe said in a statement.
Grover was sent on leave of three months after allegations of fraud and using abusive language against employees of Kotak Mahindra Bank. He reportedly claimed that the company’s investors “hand-wrapped” him to go on vacation and that he had lost faith in CEO Sameer Suhail.
While BharatPe has implicated Alvarez and Marsal and PwC for running a fine tooth through their governance practices, Mr. Grover has denied all allegations.
,