Bhakta ‘thrown off’ WhistlePig boardBy Kristiane Sherry
WhistlePig Rye Whiskey founder Raj Bhakta has been “thrown off” of the board of directors and dismissed as operating manager after being accused of fraud and criminal activity, The Spirits Business understands.
Bhakta, who founded WhistlePig in 2007, was accused of wrongdoing by fellow board members Wilco Faessen and Christopher Evison.
He has responded to the allegations with a lawsuit that seeks to overturn the board’s action, and is reportedly continuing to run the business as usual.
Faessen and Evision have yet to respond to Bhakta’s complaint, however Todd Bellucci, WhistlePig sales and marketing chief, released a statement seen by The Spirits Business: “Challenging moments define us all. We are in one now. It is how we respond to these that reveals our true character.
“Whiskey is all about character. At WhistlePig, we began with a clear vision to make the finest whiskey in the world, farm-to-bottle, on our independent 1300 acre farm. We remain dedicated to that task. All in. Full stop.”
According to the Burlington Free Press, Bhakta is facing six claims of wrongdoing.
At a board meeting earlier this month, which Bhakta was absent from, Faessen and Evision alleged he “drove while intoxicated” on 26 April, and reportedly pleaded guilty to the criminal offence of negligent operation of a motor vehicle. The second claim against Bhakta is that he “lied” to the officer by saying that he was not intoxicated.
Bhakta’s attorneys say that Faessen and Evison “blatantly mischaracterise” the offence.
The complaint reads: “Mr. Bhakta was not intoxicated that night. […] In any event, such actions do not rise to the level of ‘fraud’ or ‘criminal activity’ contemplated by the Operating Agreement,” the Burlington Free Press reports.
This agreement governs the board of directors, and allows the actions taken by Faessen and Evison only if Bhakta is shown to have committed fraud or engaged in criminal activity.
Faessen and Evision further allege that Bhakta smoked marijuana on company premises, and secretly promised an equity stake in the WhistlePig business to Danhee Kim in 2011. At that time, Kim was the newly hired marketing director, and is now his wife. He allegedly concealed this “secret promise” in a subscription dated 27 November 2012.
In his complaint, Bhakta states the omission was a “good faith oversight, not a fraud”.
It goes on to read: “Upon discovering the mistake, Mr. Bhakta promptly alerted the Board, who approved and ratified the equity award to Ms. Kim.”
“Defendants’ effort to ascribe ill-intent to Mr. Bhakta is unfounded and disingenuous.”
Bhakta owns around 50% of the WhistlePig business, which is understood to have grown 80% last year.
“This is a classic case of a founder being shoved off the thing he created for it to be put on the block, sold and turned into a commodity,” Bhakta told the Burlington Free Press.
Evison is managing director and chief investment officer at Quadrant Capital Advisors in New York, a firm that oversees the estimated $15 billion fortune of the Santo Domingo family. The family own approximately 12% of WhistlePig through WP Holdings, LLC.
Faessen is managing director for Barclays in New York and owns a 15 percent stake in WhistlePig.
Earlier this month, WhistlePig released it’s first expression matured in home-grown oak, a milestone in the company’s bid to become a farm-to-bottle distillery.