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Need for effective communication strategy to manage expectations: RBI Governor Shaktikanta Das

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The conduct of monetary policy has undergone notable changes in India and across the world as economies and markets evolved and policymakers gained greater insights into how economic agents interact in a complex economic system, he said while delivering a lecture at the National Defence College

Need for effective communication strategy to manage expectations: RBI Guv |  Business Standard News

Reserve Bank Governor Shaktikanta Das on Friday underlined the need for an effective communication strategy at the central banks, stressing that "monetary policy is an art of managing expectations”.

The conduct of monetary policy has undergone notable changes in India and across the world as economies and markets evolved and policymakers gained greater insights into how economic agents interact in a complex economic system, he said while delivering a lecture at the National Defence College.

"As monetary policy is an art of managing expectations, central banks have to make continual efforts to shape and anchor market expectations, not just through pronouncements and actions but also through a constant refinement of their communication strategies to ensure the desired societal outcomes,” he said.

The communication works both ways while too much communication can confuse the market, too little may keep it guessing about the central bank’s policy intent, he added.

The Reserve Bank of India has actively used communication through a variety of tools the MPC resolutions and minutes, exhaustive post-policy statements together with a statement on developmental and regulatory measures, press conferences, speeches and other publications, especially the biannual Monetary Policy Report (MPR) – to anchor expectations, Das said.

The governor informed that price stability under the statute has been defined numerically by a target of 4 per cent for headline Consumer Price Index (CPI) with a tolerance band of +/- 2 per cent around it.

The flexibility in the FIT (flexible-inflation targeting) regime comes from provisions to accommodate or see-through transitory supply-side shocks to inflation.

Failure to meet the monetary policy objective is defined in terms of average headline CPI inflation remaining lower or higher than the 2 to 6 per cent band for three consecutive quarters, rather than any instance where inflation exceeds/falls below the target.

"This helps monetary policy to avoid undue volatility in rate-setting behaviour that may adversely impact growth,” he said.

"The clearly defined inflation target and the band, the setting up of the MPC, the explicit accountability mechanisms for defining failure in meeting the target, the detailed resolution and the quick release of individual assessments in the minutes have strengthened transparency and credibility of monetary policy formulation in India,” Das said.

Read Also| Europe's largest nuclear power plant in Ukraine on fire after shelling

Services activity improves slightly in February, PMI rises to 51.8 from 51.5 in January

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The rise in the services PMI follows that of the manufacturing index, although the extent of the increase is smaller

Services activity improves slightly in February, PMI rises to 51.8 from 51.5  in January.

India's services activity improved slightly in February, with the sector's Purchasing Managers' Index (PMI) rising to 51.8 from 51.5.

Data released on March 4 by IHS Markit showed the services sector barely shrugged off the malaise caused by the Omicron variant-led third wave of COVID-19, which had dragged services activity to a six-month low in January.

A PMI reading above 50 shows expansion in activity, and one below 50 indicates contraction.

"Growth in the service sector failed to rebound as meaningfully as many would have hoped given that COVID-19 cases receded considerably from January's new wave and restrictions were lifted," noted Pollyanna De Lima, Economics Associate Director at IHS Markit.

"New business and services activity expanded only modestly, and at the second-slowest rates since last July. Looking at the anecdotal evidence supplied by survey participants, inflationary pressures, input shortages and the local elections dampened growth," De Lima added.

While service providers faced higher costs due to a rise in prices of chemicals, energy, food, labour, metals, plastics, and retail-related components, the increase in input cost inflation was lower than January's 10-year high.

Service providers continued to pass on these higher costs to consumers in February, although the output price inflation cooled down to a five-month low.

Even as prices continued to increase, new business increased at a faster - albeit lower than average - rate last month. On the downside, new business from abroad fell at the fastest rate since October 2021. Consequently, services sector employment fell for the third consecutive month in February. Worryingly, the fall in employment last month was the fastest since July 2021.

The marginal increase in the services PMI in February meant the composite index only edged up to 53.5 from 53.0. Data released on March 2 had shown the manufacturing PMI had risen to 54.9 in February from 54.0 in January.

Also Read| Europe's largest nuclear power plant in Ukraine on fire after shelling

Europe's largest nuclear power plant in Ukraine on fire after shelling

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A spokesman for Europe's largest nuclear plant says the facility is on fire after Russia attacked the power station in the southern Ukrainian city of Enerhodar.

Vladimir Putin

Russian forces pressed their attack on a crucial energy-producing Ukrainian city by shelling Europe’s largest nuclear plant early Friday, sparking a fire and raising fears that radiation could leak from the damaged power station.

The assault on the eastern city of Enerhodar and its Zaporizhzhia nuclear plant came as the invasion entered its second week with Russian forces gaining ground in their bid to cut off the country from the sea. Elsewhere, another round of talks between the two sides yielded a tentative agreement to set up safe corridors inside to evacuate citizens and deliver humanitarian aid.

Nuclear plant spokesman Andriy Tuz told Ukrainian television that shells were falling directly on the facility and had set fire to one of its six reactors. That reactor is under renovation and not operating, but there is nuclear fuel inside, he said.

Firefighters cannot get near the flames because they are being shot at, he said, and Ukrainian Foreign Minister Dmytro Kuleba tweeted a plea to the Russians to stop the assault and allow fire teams inside.

ALSO READ: Russia-Ukraine conflict: Another Indian student shot in Kyiv, hospitalised

“We demand that they stop the heavy weapons fire,” Tuz said in a video statement. “There is a real threat of nuclear danger in the biggest atomic energy station in Europe.”

The attack renewed fears that the invasion could result in damage to one of Ukraine's 15 nuclear reactors and trigger another emergency like the 1986 Chernobyl accident, the world’s worst nuclear disaster, which happened about 110 kilometers (65 miles) north of the capital.

The American Nuclear Society condemned the attack but said the latest radiation levels remained within natural background levels.

“The real threat to Ukrainian lives continues to be the violent invasion and bombing of their country,” the group said in a statement from President Steven Nesbit and Executive Director and CEO Craig Piercy.

The plant’s reactor is a different type than the one used at Chernobyl, and there should be little risk if the containment vessel is not damaged and outside power can be restored, said Jon B. Wolfsthal, a former senior director for arms control and nonproliferation at the National Security Council and former special adviser to then-Vice President Joe Biden.

“Everyone needs to take a step back and not jump to conclusions,” Wolfsthal, now a senior adviser at Global Zero, said on Twitter.

The Atomic Energy Agency said it was in contact with authorities in  The agency's director general, Mariano Grossi, urged military forces to refrain from violence near the plant.

The mayor of Enerhodar said earlier that Ukrainian forces were battling Russian troops on the city’s outskirts. Video showed flames and black smoke rising above the city of more than 50,000, with people streaming past wrecked cars, just a day after the U.N. atomic watchdog agency expressed grave concern that the fighting could cause accidental damage to Ukraine’s 15 nuclear reactors.

The Ukrainian state atomic energy company reported that a Russian military column was heading toward the nuclear plant. Loud shots and rocket fire were heard late Thursday.

“Many young men in athletic clothes and armed with Kalashnikovs have come into the city. They are breaking down doors and trying to get into the apartments of local residents,” the statement from Energoatom said.

Later, a live streamed security camera linked from the homepage of the Zaporizhzhia plant showed what appeared to be armored vehicles rolling into the facility’s parking lot and shining spotlights on the building where the camera was mounted.


ALSO READ: Watchdog says Chernobyl staff are exhausted amid Ukraine conflict

There were then what appeared to be bright muzzle flashes from vehicles, followed by nearly simultaneous explosions in the surrounding buildings. Smoke then rose into the frame and drifted away.

While the huge Russian armored column threatening Kyiv appeared bogged down outside the capital, Vladimir Putin's forces have brought their superior firepower to bear over the past few days, launching hundreds of missiles and artillery attacks on cities and other sites around the country and making significant gains in the south.

Ukrainian Prime Minister Denys Shmyhal called on the West to close the skies over the country's as fighting intensified. "It is a question of the security of the whole world!” he said in a statement.

The U.S. and NATO allies have ruled out creating a no-fly zone since the move would pit Russian and Western military forces against each other.

The Russians announced the capture of the southern city of Kherson, a vital Black Sea port of 280,000, and local Ukrainian officials confirmed the takeover of the government headquarters there, making it the first major city to fall since the invasion began a week ago.

Heavy fighting continued on the outskirts of another strategic port, Mariupol, on the Azov Sea. The battles have knocked out the city's electricity, heat and water systems, as well as most phone service, officials said. Food deliveries to the city were also cut.

Associated Press video from the port city shows the assault lighting up the darkening sky above largely deserted streets and medical teams treating civilians, including one inside a clinic who appeared to be a child. Doctors were unable to save the person.

Severing Ukraine's access to the Black and Azov seas would deal a crippling blow to its economy and allow to build a land corridor to Crimea, seized by Moscow in 2014.

ALSO READ: A look at how the West is punishing Russia for its invasion on Ukraine

Overall, the outnumbered, outgunned Ukrainians have put up stiff resistance, staving off the swift victory that appeared to have expected. But a senior U.S. defense official, speaking on condition of anonymity, said Russia’s seizure of Crimea gave it a logistical advantage in that part of the country, with shorter supply lines that smoothed the offensive there.

Ukrainian leaders called on the people to defend their homeland by cutting down trees, erecting barricades in the cities and attacking enemy columns from the rear. In recent days, authorities have issued weapons to civilians and taught them how to make Molotov cocktails.

“Total resistance. ... This is our Ukrainian trump card, and this is what we can do best in the world,” Oleksiy Arestovich, an aide to Ukrainian President Volodymyr Zelenskyy, said in a video message, recalling guerrilla actions in Nazi-occupied during World War II.

The second round of talks between Ukrainian and Russian delegations was held in neighboring Belarus. But the two sides appeared far apart going into the meeting, and Putin warned Ukraine that it must quickly accept the Kremlin's demand for its “demilitarization" and declare itself neutral, renouncing its bid to join NATO.

Putin told French President Emmanuel Macron he was determined to press on with his attack "until the end,” according to Macron's office.

The two sides said that they tentatively agreed to allow cease-fires in areas designated safe corridors, and that they would seek to work out the necessary details quickly. A Zelenskyy adviser also said a third round of talks will be held early next week.

Despite a profusion of evidence of civilian casualties and destruction of property by the Russian military, Putin decried what he called an “anti-Russian disinformation campaign” and insisted that Moscow uses “only precision weapons to exclusively destroy military infrastructure.”

Putin claimed that the Russian military had already offered safe corridors for civilians to flee, but he asserted without evidence that Ukrainian “neo-Nazis" were preventing people from leaving and were using them as human shields.

He also hailed Russian soldiers as heroes in a video call with members of Russia's Security Council, and ordered additional payments to families of men killed or wounded.

A top Russian officer, Maj. Gen. Andrei Sukhovetsky, commander of an airborne division, was killed in the fighting earlier this week, an officers organization in reported.

The Pentagon set up a direct communication link to Russia's Ministry of Defense earlier this week to avoid the possibility of a miscalculation sparking conflict between Moscow and Washington, according to a U.S. defense official who spoke on condition of anonymity because the link had not been announced.

The fighting has sent more than 1 million people fleeing Ukraine, according to the U.N., which fears those refugee numbers could skyrocket.

The immense Russian column of hundreds of tanks and other vehicles still appeared to be stalled roughly 25 kilometers (16 miles) from Kyiv and had made no real progress in days, amid fuel and food shortages, according to U.S. authorities

Article Source:-  Business Standard.

Russia-Ukraine war disrupts India's commodity exports to the region

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The movement of tea, seafood and coffee, which are among the key items exported from India to Russia, has been impacted by the conflict.

Russia-Ukraine war disrupts India's commodity exports to the region

The Russia-Ukraine feud has plunged Indian commodity exports to the region into disarray, with port disruptions and payment delays hitting shipments.

Russia is a major export destination for various products from India. Indian exports to Russia came to over $2.5 billion out of a total bilateral trade of $8.1 billion in 2020-21. Ukraine is also a growing market for Indian exports, albeit on a smaller scale.

The movement of food products such as tea, seafood and coffee, which are among the important items exported from India to Russia, has been impacted by the conflict between the two European nations.

Exporters are expecting the government to take steps to redeem the situation as there are goods in transit that have been stuck midway. The recent announcement by major shipping lines Maersk and MSC to suspend operations to Russia may force exporters to stop sending consignments to the country till the tussle is resolved.

Russia is the largest importer of Indian tea, accounting for 17-18 percent of the total volume of the beverage exported from the country. "The rouble has fallen to 100-110 a dollar from 74-75. Russians may not want to buy at this rate,’’ said Anshuman Kanoria, Chairman of the Indian Tea Exporters Association.

He also expressed concern over the revision of policy by the Export Credit Guarantee Corporation putting Russia under the restricted cover category. "The export to Russia will depend on the length of the war, sanctions from the West and the Indian government’s stand on the issue.’’

The conflict has broken out at a time when tea exports are yet to recover from the blow dealt by Covid-19. Indian tea exports have fallen below 200 million kgs after a long time. Tea exports in 2021 stood at 195.50 million kgs, per Tea Board data, about 7 percent below the low of 209.72 million kgs in 2020. In the pre-Covid years, exports hovered around the 250 million kg mark.

Seafood stuck

As for seafood, exporters are in danger of losing a market that was developed over the last few years. The industry expects exports to be worth $180 million in FY22 against $150 million in the previous year. But according to industry sources, the situation does not look promising, with around Rs 500 crore worth of seafood stuck in transit.

"Russia buys a lot of shrimp as well as cephalopods such as squid, cuttlefish and octopus from India. A lot of consignments are in transit. Access to St Petersburg, the main port in Russia, seems to be blocked. We are not sure whether the Black Sea ports are open,’’ said Anwar Hashim, MD of Abad Fisheries.

In recent years the Indian seafood sector has penetrated the market in Russia as well in neighbouring countries such as Ukraine, Belarus, Kazakhstan and Moldova, through the efforts of the Marine Products Export Development Authority and exporters. Ukraine currently imports $10 million worth of seafood from India.

Shipping woes

Shippers, too, are anticipating payment problems. "The move by the western nations to block Russian banks’ access to the Swift international payment system may cause payment delays. Earlier the trade was in roubles but now it is entirely in dollars,’’ Hashim said.

Russia is the fourth-largest buyer of coffee from India after Italy, Germany and Belgium. In 2021, the country bought 11,241 tonnes, about 5 percent of the total coffee exports from the country. Ukraine is the tenth biggest buyer of Indian coffee.

Russia’s purchases from India are mostly confined to instant coffee. It used to buy raw coffee from India earlier but has now shifted to other cheaper origins. "Russia accounts for 20 percent of our total exports,’’ said Challa Shrishant, MD of CCL Products, the biggest exporter of instant coffee from India. "We are assessing the impact of the war as some of our consignments are on the way. We also need clarity as to where we should transport the consignment, for which we have received payment."

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Reliance, USA's Sanmina announce partnership for electronics manufacturing

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Reliance will hold a 50.1 per cent stake in the JV after the investment in Sanmina's existing Indian entity through a Reliance unit.

Reliance

India’s Reliance Industries said on Thursday it would invest Rs 1670 cr to create a joint venture (JV) with U.S.-listed Corp for making electronic products in Chennai.

The JV aims to make hardware for 5G communications, cloud infrastructure, healthcare systems, and defense and aerospace, Reliance said in a regulatory filing.

Reliance will hold a 50.1 per cent stake in the JV after the investment in Sanmina's existing Indian entity through a Reliance unit. will contribute its existing contract manufacturing business to the JV.

All manufacturing will initially take place at Sanmina's campus in Chennai, with an option for expansion in other manufacturing sites within the country.

The day-to-day business will continue to be managed by Sanmina’s existing management team in Chennai, said a statement from the two sides. The JV will create an electronic manufacturing hub, prioritising high technology infrastructure hardware

“We are excited to partner with Reliance to build the premier integrated manufacturing solutions company in India,” stated Jure Sola, Chairman and Chief Executive Officer of 

“We are delighted to work with Sanmina to access the significant market opportunity for high-tech manufacturing in India,” said Akash Ambani, Director, Reliance Jio, said.

Sanmina's campus in Chennai is spread over 100 acres and hosts a "centre of excellence" for electronics manufacturing, research and prototyping.

Completion of the transaction is subject to customary closing conditions, including regulatory approvals. The transaction is expected to close no later than September 2022.

Also Read | Amazon may file criminal case against Future over store transfers: Report



Amazon may file criminal case against Future over store transfers: Report

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Amazon.com Inc plans to initiate criminal court proceedings this week against its Indian partner Future Retail for allowing the transfer of assets to a major rival despite a legal prohibitionAmazon

com Inc plans to initiate criminal court proceedings this week against its Indian partner for allowing the transfer of assets to a major rival despite a legal prohibition, three sources with direct knowledge of the matter told Reuters.

For more than a year, and Future Group have been in a legal stand-off that has stalled Future's $3.4 billion sale of assets to Reliance Industries.

successfully halted Future's asset sale to rival Reliance since 2020 by citing violation of certain contracts.

Future, India's second largest retailer, denies any wrongdoing. Amazon's position has been backed by a Singapore arbitrator and Indian courts.

Reuters reported this week that Reliance had started to take over around 500 of Future's stores, rebranding them as its own outlets.

Reliance had previously transferred leases of some of Future's flagship supermarkets to its name, but allowed Future to continue to operate them. Reliance has now begun to take possession of them after Future failed to make rental payments to it, sources have said.

Amazon plans to initiate criminal proceedings against Future in a New Delhi court, and to urge the court to order an investigation into the matter, one of the sources, who has direct knowledge of the plans, said.

Two other sources said the lawsuit could be filed as early as this week.

Future, Amazon and Reliance did not immediately respond to Reuters' emails seeking comment.

Amazon will allege that Future concealed information during legal proceedings and allegedly transferred leases of its stores to rival Reliance, even though a Singapore arbitrator had halted any transfer or disposal of assets in the ongoing dispute, the first source added.

"This is going to be Amazon's last attempt (to stop the deal)," said this source.

The plan to start criminal court proceedings would mark a significant escalation in the legal battle between Amazon and its Indian retail rivals - and Reliance, which is led by Indian billionaire Mukesh Ambani.

The protracted fight over Future's assets is seen as a battle for retail supremacy between Reliance and Amazon in India's booming retail market.

In blocking the Future-Reliance transaction, Amazon has long argued that Future violated the terms of a 2019 deal in which the U.S. company invested $200 million in part of the Indian company. 

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Share Market Closing Note

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Benchmark indices ended the session in the red buy recovered about 600 points with Sensex falling 689.78 points or 1.23% at 55557.50, and the Nifty shedding 165.10 points or 0.98% at 16628.80. About 1642 shares have advanced, 1537 shares declined, and 101 shares are unchanged.

Stock Market closed on flat note. Rangebound move witnessed in Nifty.

Among the sectors, the auto and banking index shed 2 percent each while buying was seen in metals and power stocks.


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Topic :- Time:3.00 PM

Nifty spot close above 16600 level will result in some upmove in coming session and if it closes below above mentioned level then some sluggish movement can follow in the market. Avoid open positions for tomorrow.

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Topic :- Time:2.30 PM

Crudeoil Trading View:

CRUDEOIL is trading at 8300.If it holds below 8340 level then expect some decline in it. Crudeoil can show good upmove again once it crosses 8340 level again.

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Topic :- Time:2.00 PM

Nifty is likely to turn volatile again. Nifty spot if breaks and trade below 16520 level then expect some decline in the market and if it manages to trade and sustain above 16560 level then some upmove can follow in the Nifty.

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Topic :- Time:1.30 PM

GOLD Trading View:

GOLD is trading at 51898.If it manages to trade and sustain above 51920 level then expect some upmove and if it breaks and trade below 51820 level then some decline can follow in it.

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Topic :- Time:12.30 PM

COPPER Trading View:

COPPER is trading at 785.40.If it manages to trade and sustain above 786 level then expect some upmove in it and if it breaks and trade below 783.80 level then some decline can follow in Copper.

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Topic :- Time:12.00 PM

Nifty is highly volatile and is expected to turn more volatile now. Nifty spot if manages to trade and sustain above 16560 level then expect some upmove and if it breaks and trade below 16520 level then some decline can follow in the market.

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Topic :- Time:11.30 AM

News Wrap Up:

1. Sensex drops 900pts, Nifty below 16600; Bank, Auto stocks drag

2. India factory growth accelerated in Feb, inflation remains a concern

3. Indian investors can trade in select US stocks via NSE IFSC from March 3

4. Oil at 7-yr high as markets avoid Russian supply

5. Saudi Arabia may raise April crude prices to Asia to all-time highs

6. Russian stocks removal from global indices to divert FPI flows into India

7. Adani Group to acquire minority stake in Quint Digital arm; stock zooms 20%

8. Eveready falls 7% after Burman Family makes an open offer to buy 26% shares

9. ONGC, Oil India surge 10%; gain up to 41% in 6 months on high oil prices

10. China warns US of heavy price for backing Taiwans independence

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Topic :- Time:11.00 AM

Russia carries out nuclear submarine drill in Barents sea. Are we heading towards Nuclear attack or war? Investors are advised to avoid fresh investment and should prefer to do day trading.

After gap down opening nifty is still in struggling zone. Nifty spot if breaks and trade below 16550 level then expect some decline in the market and if it manages to trade and sustain above 16600 level then some upmove can follow in the market.

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Topic :- Nifty Opening Note


Indian Stock Market Trading View For 02 March,2022:


Nifty is likely to remain highly volatile and is expected to follow global cues. Traders are advised to trade with strict stoploss and as per market trend.


Nifty spot if manages to trade and sustain above 16820 level then expect some upmove in the market and if it break and trade below 16720 level then some decline can follow in the market. Please note this is just opening view and should not be considered as the view for the whole day.


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Moody's places ratings of 51 Russian companies on review for downgrade

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The action comes after Moody's placed Russia and Ukraine's ratings on review for downgrade on February 25.

Moody's places ratings of 51 Russian companies on review for downgrade

Moody's Investors Service has placed the ratings of 51 Russian companies on review for downgrade.

The action, announced by the ratings agency on March 2, comes after it placed Russia and Ukraine's ratings on review for downgrade on February 25 after President Vladimir Putin approved an invasion of Ukraine.

Moody's currently has a Baa3 rating on Russia and B3 on Ukraine.

Also read: Russia Ukraine War News LIVE Updates

"Today's rating actions on the affected corporates are a direct consequence of the sovereign rating action and reflect Moody's view that a potential downgrade of Russia's sovereign ratings and lowering of its country ceilings could or would lead to downgrades of the affected corporates' ratings, because of their strong interlinkages with the sovereign rating," Moody's said in a statement on Mach 

The review for downgrade, in particular, will take into account (1) Russia's sovereign ratings and country ceilings following the conclusion of the sovereign review; (2) the affected corporates' individual credit factors, including the effect of sanctions on their credit quality; and (3) the likelihood of potential state support to the corporates in the event of financial distress," it added.

The Russian companies affected by Moody's latest announcement include energy heavyweights Rosneft and Gazprom. The entire list of affected companies can be found here.

The invasion of Ukraine has hurt Russian companies hard, with economic sanctions driving down their share prices. Russian authorities have looked to soften the blow, with the government announcing a plan to purchase shares worth 1 trillion rubles of companies that have been sanctioned.

On February 25, Moody's had said that "serious concerns" around Russia's ability to manage the impact of the economic sanctions on the economy, government finances, and the financial system may result in a ratings downgrade.

"However, in the low likelihood that Moody's concluded that significant new economic and financial sanctions were to have a very limited impact on Russia's economy and financial buffers, one possible outcome of the review will be to confirm Russia's ratings with a negative outlook," the agency had said.

Article Source:- Moneycontrol

Volodymyr Zelensky says Russia wants to 'erase' Ukraine

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In a video address, the Ukrainian leader said a missile strike on a target at the site of a Holocaust massacre shows that "for many people in Russia our Kyiv is completely foreign.

Volodymyr Zelensky says Russia wants to 'erase' Ukraine

Ukraine's President Volodymyr Zelensky on Wednesday accused Russia, which has launched an invasion of his country, of seeking to "erase" Ukrainians, their country and their history.

In a video address, the Ukrainian leader said a missile strike on a target at the site of a Holocaust massacre shows that "for many people in Russia our Kyiv is completely foreign.

"They know nothing about our capital. About our history. But they have an order to erase our history. Erase our country. Erase us all," he said.

Ashneer Grover's family siphoned funds to lead lavish lifestyle: BharatPe

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Ashneer Grover's family and their relatives engaged in extensive misappropriation of company funds, including creating fake vendors through which they siphoned money, says company in statementAshneer Grover, co-founder and MD, BharatPe


Since the fight between Ashneer Grover and BharatPe’s board began two months back, the company for the first officially accused the embattled founder's family and relative of misappropriating funds on Wednesday.

“The Grover family and their relatives engaged in extensive misappropriation of company funds, including, but not limited to, creating fake vendors through which they siphoned money away from the company’s account and grossly abused company expense accounts in order to enrich themselves and fund their lavish lifestyles,” said 

“The company reserves all rights to take further legal action against him and his family. The Board will not allow the deplorable conduct of the Grover family to tarnish BharatPe’s reputation or that of its hard-working employees and world-class technology. As a result of his misdeeds, Mr. Grover is no longer an employee, a founder, or a director of the company,” it added.

The company also said that the Board is taking all necessary steps to further strengthen the company’s corporate governance, including the appointment of an audit committee, an internal auditor, and the implementation of other key internal controls.

"I am appalled at the personal nature of the company’s statement, but not surprised. It comes from a position of personal hatred and low thinking. I think the Board needs to be reminded of $1 million of secondary shares bought from me in Series C, $2.5 million in Series D and $8.5 million in Series E," said Ashneer Grover in response to BhatatPe allegations today.

"I would also want to learn who among Amarchand, PWC and A&M has started doing audit on ‘lavishness’ of one’s lifestyle ? The only thing lavish about me is my dreams and ability to achieve them against all odds through hard work and enterprise. I hope the Board can get back to working soon - I as a shareholder am worried about the value destruction. I wish the Company and the Board a speedy recovery," he added.

Business Standard reported earlier that the fintech unicorn is looking to hire a chief financial officer, an internal audit head and stren­gthen its procurement processes in the next one month, according to sources close to developments.

Grover resigned as managing director (MD) and company’s board director on Monday. The company later said Grover’s resignation letter was received within minutes after a board meeting was called to deliberate on an audit report by accounting firm PwC.

Although the board meeting happened on Tuesday night, the company has not disclosed what decisions were taken – and whether an FIR will be filed based on the audit report.


"The Board of noted the termination of employment of Ashneer Grover as a consequence of his resignation from the post of MD as well as Director. However, as he resigned without the approval of the board and majority investors, consequences under the Shareholder agreement have now been triggered," said a source close to the developments.

Grover currently has around 9 per cent shareholding in the company. The board meeting, which started late Tuesday evening (as some directors are in the US), was expected to touch upon the possibility of clawing back his shares in accordance with the articles of association and shareholding agreement.

A source close to the development said Grover currently has 9.5 per cent shareholding in the company. However, the board meeting, which started late Tuesday evening (as some directors are in the US), was expected to touch upon the possibility of clawing back his shares in accordance with the articles of association and shareholding agreement.

“They can’t do anything with the shares since the shareholder agreement (SHA) does not allow them at all (to claw back shares),” Grover earlier told Business Standard earlier this week.

Grover’s resignation came days after a plea filed by him with the Singapore International Arbitration Centre was dismissed. In his petition, the co-founder had sought indemnity from the audit report and asked to render it invalid as it did not comply with the SHA.

Also Read Investor-founder relation in India is one of master-slave: Ashneer Grover

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