All you want to know about the row between Kotak Group and BharatPe co-founder

by 5paisa Research Team Last Updated: Jan 11, 2022 - 03:09 pm 40.3k Views

The Kotak Mahindra Group and BharatPe co-founder and managing director Ashneer Grover are at loggerheads over alleged use of inappropriate language by the latter against one of Kotak’s employees. 

Kotak Mahindra Wealth, the wealth management arm of Kotak Mahindra Bank, has raised objections against Grover and has warned of legal action.

The move came in response to Grover and his wife, Madhuri Grover, sending a legal notice to Kotak Mahindra Bank chief and well-known banker Uday Kotak as well as some other senior group executives.

In the notice dated October 30, 2021, Grover accused the bank’s wealth unit of failing to provide him financing and allocation of shares in an IPO launched by beauty firm Nykaa late last year, media reports said.

So, what exactly did the Kotak Group say in its statement?

Kotak acknowledged that it had received a notice from Grover and said that it had replied to it “appropriately” at the time, including placing on record its objections to inappropriate language used by Grover.

“Appropriate legal action is being pursued,” Kotak said, according to multiple media reports, citing a statement by the financial services giant. “We would like to confirm that there is no breach or violation by the Kotak Group in any manner whatsoever,” the statement read.

When did the case come into the public domain?

It became public knowledge about a week ago when a leaked audio call began circulating on social media. In the cal, Grover could be heard using abusive language and threatening a Kotak employee. 

On Jan. 6, Grover claimed that the viral audio clip was “fake” and that it was a “scamster” who had put it out.

“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 had tweeted.

Grover subsequently deleted the tweet where he claimed the audio was fake. The audio clip, too, has been taken down.

The statement by the Kotak Group now raises questions over Grover’s claims that the audio clip was fake, media reports said. 

Apart from Uday Kotak, who else received the legal notice from Grover?

Grover’s notice was also addressed to Oisharya Das, CEO of Kotak Wealth Management; Shanti Ekambaram, Kotak Mahindra Bank’s Group President for Consumer Banking; and KVS Manian, who heads Corporate, Institutional and Investment Banking, according to the reports.

What did Grover and his wife say in the notice?

In the notice, Grover and his wife sought damages for the gains they would have made after subscribing to shares worth Rs 500 crore in Nykaa, besides Rs 1 lakh towards the cost of the legal notice, as per a Moneycontrol report.

“Kotak’s refusal to provide IPO financing to our clients at the eleventh hour has completely crippled our clients’ ability to participate in the Nykaa IPO and deprived them of a business/investment opportunity about which they had informed Kotak more than a month in advance of the launch of the IPO,” the notice said.

“Had Kotak informed our clients at the very beginning that it would be unable to provide IPO financing for the Nykaa IPO, our clients would have approached other financiers who were ready and willing to provide IPO financing to our clients for this IPO,” the notice read. 

It asked Kotak to provide IPO financing to Grover and his clients for the Nykaa IPO and allocate shares of Nykaa worth Rs 500 crore before the closing of the Nykaa IPO on November 1, 2021. If Kotak failed to do so, the notice said, it would be liable to compensate the clients.

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