Nykaa IPO: Kotak, BharatPe co-founder trade charges – Times of India

John Sarkar & Reeba Zachariah | TNN
New Delhi/Mumbai: Kotak Mahindra Bank on Sunday warned of legal action against Bharat Pe co-founder Ashneer Grover and his wife Madhuri for alleged use of unparliamentary language and threat to the lender’s employees after it emerged that the duo had served a legal notice to MD & CEO Uday Kotak and three members of his senior management team, accusing the bank of failing to provide financing and allocating shares during Nykaa’s IPO.
The Grovers claimed that they had planned to invest Rs 500 crore in Nykaa through Kotak’s IPO financing services.
According to the October 30, 2021 notice sent by law firm Regstreet on behalf of the Grovers, Kotak had assured the couple allocation of shares in the Nykaa IPO but was later informed that it would not be able to provide IPO financing due to “erratic FII movements” and “very high lending rates”.
“Kotak’s refusal to provide IPO financing to our clients at the eleventh hour has completely crippled (their) ability to participate in the Nykaa IPO and deprived them of an investment opportunity about which they had informed Kotak more than a month in advance of the launch of the IPO,” read the notice signed by Regstreet partner Sumit Agrawal.
The Grovers sought compensation covering listing gains had shares worth Rs 500 crore were allocated to them in the Nykaa IPO. The notice added that Kotak had provided financing in the Nykaa IPO to BharatPe CEO Suhail Sameer.
Kotak, however, denied any breach in its financial assistance to the Grovers. “Your clients are well aware that financial assistance is at the sole discretion of the lender and that there is neither any concluded contract nor any sanction letter executed in favour of (them). Therefore, your clients do not have any contractual or other rights enforceable against (Kotak) as alleged or otherwise. We deny allegations levelled by your clients that any amount is due and payable by (the bank) as claimed in the legal notice,” Khaitan & Co on behalf of Kotak wrote in its reply dated November 2, 2021.
The development assumes significance after a leaked audio call clip allegedly featuring Ashneer abusing and giving death threats to a Kotak employee for failing to provide funding for the Nykaa IPO went viral. Ashneer had subsequently termed the audio clip fake.Khaitan further said that “Your clients have, in the recent past, on several occasions called (Kotak) employees on the phone and had issued threats to their lives besides using unparliamentary and foul language, for which (Kotak) and its employees reserve their rights to take appropriate legal steps.”
The case provides a new twist to the standoff between Ashneer, a former Kotak employee and new age tech entrepreneur and Uday Kotak, one of the world’s richest bankers. BharatPe, an unicorn with a $1 billion valuation, recently forayed into Uday Kotak’s main business domain following its purchase of Punjab and Maharashtra Co-operative Bank in partnership with Centrum.
“Your clients’ assertion that there was no concluded contract in favour of (the Grovers) for the purposes of financing the Nykaa IPO is surprising, given the repeated assurances given by (them) to the contrary. (The Grovers) reserve their right to produce conversations between them and your clients exchanged on WhatsApp, which would lay bare the falsity of your clients’ case. Prior to reneging on their promise, your clients had never once indicated any reluctance or inability in rendering IPO financing services to (them) to the tune of Rs 500 crore for the Nykaa IPO,” read the November 8, 2021 counter-reply by Agrawal.
“(The Grovers) vehemently deny the defamatory allegations pertaining to any unparliamentary or foul language having been used by them, or that they have issued any threats to your clients or its representatives whatsoever. It is evident that your clients have concocted these allegations merely as a counterblast to the claims made by (the Grovers) for the breach of various legal obligations committed by your clients.”
The counter-reply further stated that the Grovers will be “withdrawing all banking operations maintained by them with Kotak”.
BharatPe did not offer any comment on the report, Kotak, however, confirmed receipt of legal notice sent by the Grovers and said that it had also replied to it including “placing on record our objections to inappropriate language used by Grover”. Appropriate legal action is being pursued, it added.The lender, however, did not elaborate on this. “We would like to confirm that there is no breach or violation by Kotak in any manner whatsoever.”