Fintech unicorn BharatPe was cofounded by Koladiya and Shashvat Nakrani in July 2017 and incorporated in March 2018. Grover joined as the third co-founder in June 2018. 
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Fintech unicorn BharatPe was cofounded by Koladiya and Shashvat Nakrani in July 2017 and incorporated in March 2018. Grover joined as the third co-founder in June 2018. Bharat Pe cofounder Ashneer Grover has written to the National Payments Council of India (NPCI) accusing BharatPe’s original founder Bhavik Koladiya of data theft. He has also written to BharatPe's independent director Kaushik Dutta stating the same facts.
In an email on February 6, BharatPe’s former CEO Grover alleged that Koladiya has misused his position and pulled off India’s biggest data theft, a report in Moneycontrol stated. He said Koladiya has allegedly stolen details of around 150 million Unified Payments Interface (UPI) users.
“It was a grave mistake of giving him (Koladiya) a chance at redemption at BharatPe, which he misused to pull off the biggest data theft in India till date…Bhavik previously was convicted in the US for credit card fraud, where he was put under house arrest for 18 months and subsequently deported to India. And, in India, he also has an FIR registered against him at Delhi airport as he attempted to travel to Gujarat on a forged ticket. I’ve attached documents pertaining to his conviction and a copy of the FIR,” Grover wrote in the email.
He added that BharatPe has processed billions of UPI transactions at merchants and in turn was privy to data of more than 150 million UPI users in the country. "The data of transacting users was obtained at BharatPe using APIs with Yes Bank, Federal Bank, and ICICI Bank," Grover said.
Denying the allegations, Koladiya said that Grover is retaliating after his removal from BharatPe. "I strongly deny the baseless and false allegations made against me by Ashneer Grover. The allegations are nothing but an act of retaliation and frustration on his part, resulting from his removal from BharatPe and my ongoing legal suit against him in Delhi High Court,” Koladiya was quoted in Moneycontrol’s report.
“I take the privacy and security of our users very seriously and I do not take these allegations lightly. However, in this particular case, there is no cause for concern as the claims made by Mr. Grover are completely without merit,” he added.
Grover added that Koladiya floated another company, OTPLess in the name of his wife, and transferred all the privileged and confidential data of BharatPe.
“Bhavik did a very systematic fraud, where he formed another company in the name of his wife Dharti Koladiya by the name of ‘Otpless Solutions Private Limited’ in 2021, while he still was at BharatPe. He then transferred all the privileged and confidential data of BharatPe to this company OTPLess. He also hired the core team he worked at BharatPe at OTPLess over time,” Grover wrote in the email.
Grover said that whistleblowers within BharatPe brought this data theft development to his attention.
“Whistleblowers are being silenced (hushed up) by the current management under Chairman Mr. Rajnish Kumar,” he added.
Grover has requested NPCI to conduct a forensic audit of OTPLess servers and BharatPe architecture/servers to look into the matter. “This is a serious breach of privacy of UPI users and should be punishable under law,” Grover wrote.
Koladiya resigned from his position at BharatPe in August 2022. He started OTPLess, a platform that allows users to sign in to any website using WhatsApp, along with Tanmay Sagar and Satyam Nathani.
BharatPe in its response to the allegations said that the customers’ data are protected and it observes high-security standards. “This allegation is malicious and completely baseless. BharatPe fiercely protects the data of its customers and observes high-security standards…OTPless is our service provider that only enables verification via WhatsApp and is used by less than 10 per cent of our merchant base and we are fully compliant on all our data privacy obligations with our customers and partners,” BharatPe’s official spokesperson said.
Ashneer Grover vs Bhavik Koladiya
Fintech unicorn BharatPe was cofounded by Koladiya and Shashvat Nakrani in July 2017 and incorporated in March 2018. Grover joined as the third co-founder in June 2018. Before Grover came on board, Koladiya was the company’s face back then and was dealing with prospective investors.
As per Registrar of Companies filings, with Grover on board, BharatPe’s shareholding structure was as follows: Grover got 32 per cent equity, Nakrani held 25.5 per cent, and Koladiya had the largest share in the company with a 42.5 per cent stake.
But it was alleged that six months later in December 2018 just before Sequoia came on board as an investor, Koladiya’s name went missing from the founders' list. His name was removed as “many institutional investors were not comfortable with a person with a jail term in the US”.
Following this, Grover became the face of the brand BharatPe, while Koladiya remained the tech backbone of BharatPe and was a ‘consultant’.
The founders and other stakeholders reportedly agreed to minimise Koladiya’s public involvement with the firm. The arrangement involved him transferring his stake to Grover, Nakrani, Nakrani’s father, and some angel investors.
High Court case
In January 2023, Koladiya dragged Grover to the Delhi High Court to reclaim his shares in the company, which he transferred to Grover.
Grover, all this while, has maintained that Koladiya had sold his shares to him and other buyers including Nakrani and early investors.
But Koladiya said that he had an agreement with Nakrani and Grover in 2018 to get his ‘pledged shares’ of BharatPe.
He also said that while Nakrani had honoured the deal following which he was expected to become a shareholder of BharatPe, Grover had not reverted.
Also read: BharatPe appoints top executives in governance & compliance roles amid Ashneer Grover row
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