 "MCA issues fresh notice to fintech BharatPe as part of ongoing inquiry")
BharatPe has received a fresh notice from the Ministry of Corporate Affairs (MCA) requesting details about its operations and legal actions taken against co-founder Ashneer Grover, according to a report by The Economic Times (ET). The notice also raises queries regarding the findings in a status report submitted by the Delhi Police's Economic Offences Wing (EOW), which investigated allegations of financial irregularities within the company.
The notice to BharatPe falls under Section 206 of the Companies Act, mandating companies to furnish information requested by the registrar and granting the ministry authority to inspect company books or initiate an inquiry.
Confirming the receipt of the notice, BharatPe told ET that it pertained to an inquiry initiated in 2022. The Registrar of Companies, a department under the ministry, has sought additional information through a letter to the company. BharatPe emphasised that the requested information is part of the ongoing inquiry mentioned in its audited results and affirmed its cooperation with the authorities.
This development comes amidst growing government and regulatory scrutiny of fintech firms concerning compliance and internal governance. The Reserve Bank of India (RBI) recently directed Paytm's payments bank unit to cease accepting deposits and providing banking services after February 29, citing violations of various norms, including KYC guidelines.
BharatPe has been entangled in legal disputes with co-founder Ashneer Grover and his wife, Madhuri Jain. The company filed a civil suit against Grover and his family members in December 2022, seeking damages for alleged embezzlement of funds. Last year, the EOW filed an FIR against Grover and others for alleged fraud after a complaint by BharatPe.
Earlier this month, Grover and his wife approached the Delhi High Court seeking the quashing of a Look Out Circular (LOW)issued against them in connection with the investigation. The court has directed the authorities to consider their application for permission to travel abroad.
Jain, formerly the head of controls at BharatPe, was terminated in 2022 following a forensic audit revealing irregularities, while Grover resigned as CEO in March 2022 amidst these controversies.