BharatPe moves to a more robust Governance framework ahead of the planned IPO

10-05-2022

New Delhi, May 10, 2022: In January 2022, the board of BharatPe initiated the corporate governance review of the company. The company appointed Alvarez & Marsal (A&M), a global professional services firm notable for its work in turnaround management and performance improvement, Shardul Amarchand Mangaldas & Co. (SAM), India's leading law firm, to help the board and management with its governance review and PwC, a leading consulting firm to determine wilful misconduct and gross negligence by a former founder.

After a detailed review of the above report over the last two months, the board of BharatPe has recommended several decisive measures that are being implemented. Below is a summary of key actions:

Corporate Governance Review

The review has identified a set of measures to strengthen internal processes and controls. These include:

The new code of conduct: This will be applicable to senior management and employees and has now been implemented. The code of conduct inter-alia deals with the conflict of interest and other issues that will help to strengthen overall governance in the company.
A comprehensive Vendor Procurement policy: A new and comprehensive Vendor Procurement Policy has also been developed to ensure that a robust mechanism is in place for on-boarding and engaging with vendors and mitigate any risk of employees indulging in suspicious transactions to enrich themselves
- Many vendors involved in malpractices, such as incorrect or inflated invoices, have been blocked for further business with the company. These vendors were also identified during the GST Enquiry. The company has already issued legal notices to these vendors to recover the amount and will be filing civil/criminal cases against them in the coming days.
Key personnel appointments including a CHRO: A full-time CHRO and an interim CFO have joined the company. The company is also in the process of finalizing the candidate for the role of CFO, and the same will be closed in the current quarter.
Internal audit to be done on a regular basis: Mazars India, a global audit firm, has been appointed by the company as an internal auditor.
BharatPe has also terminated the services of several employees in departments who were directly involved with these blocked vendors. If required, the Company will be filing criminal cases against some of these employees for the misconduct and act of cheating committed by them against the company.
The company has initiated necessary action against the former Founder to claw back his restricted shares as per the shareholders' agreement. It will take all steps to enforce its right under the law.
IT Infrastructure Management: A new IT infrastructure management policy is also now in place

Current Performance

Thanks to our world-class team's commitment and hard work, BharatPe registered the strongest quarter in its history (Q4, FY22). We have registered 4x growth in our overall revenue over the same period last year. On a sequential-quarter basis, the growth has been 30%, despite the third wave of Covid-19. Comparing month-on-month, all our metrics have grown at the fastest pace, i.e., merchant Total payments value, i.e., TPV (17%), consumer TPV (39%), loans facilitated in partnership with RBI registered NBFCs (31%), and revenue (21%) in March 2022 over February 2022. Going forward, we are tracking well to break even on our merchant business and further strengthen our consumer business.

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