PhonePe, one of India's go to digital payments, has filed a formal complaint with the Securities and Exchange Board of India (Sebi) against Ventureast, an early-stage investment fund, and its top executives.

The central idea of the suit is that Ventureast, an investor in the homegrown content discovery platform Indus OS, engaged in 'deliberate side transactions' with technology firm Affle Global in an attempt to scuttle PhonePe's acquisition of Indus OS.

Indus OS object to PhonePe's acquisition, the latter is also a minority stakeholder in Indus OS, which has opposed the merger. “Serious misrepresentations, including a series of unethical and bad faith actions, as well as potentially illegal actions, that have been and are being continuously undertaken by the managing partner, general partner, and principal of Ventureast involved with this transaction”, PhonePe said in its complaint to the market regulator.

PhonePe filed a complaint with Sebi alleging that Ventureast sold its investment in IndusOS to Affle, giving it a nearly 23 percent share, although the terms of an acquisition by PhonePe had already been approved.

PhonePe's seemingly straightforward acquisition of Indus OS for $60 million has fallen into difficulty, as ET has exclusively reported, after Affle objected to the sale. Affle has filed a lawsuit in Singapore against Indus OS and PhonePe, seeking an injunction against the proposed transaction.

In return, PhonePe has filed a countersuit against both Affle and Ventureast.

Indus OS, which wants to seal the deal with PhonePe, filed a petition against Affle in a Singapore court earlier this month, according to ET.

ET has been reporting on the court battles around the takeover over the past few weeks. PhonePe was nearing completion of its acquisition of Indus OS, but Affle Global had filed an injunction in Singapore, claiming it had the right of first refusal over the transfer of the founders' interest to PhonePe.

Affle Global earlier informed ET that it had invested more than $20 million in Indus OS and owns a 20 percent share in the company, valuing it at $90 million. Another source of contention is the $60 million valuation of Indus OS by PhonePe.

“Our investors hold us to the greatest levels of legal and ethical integrity as founders. These criteria, however, should also apply to startup investors. In this scenario, I feel VPF (Ventureast Proactive Fund-II) has not only violated Sebi's rule of conduct, but has also failed to fulfil its fiduciary obligations as a major stakeholder of Indus OS. VPF has harmed OSLabs' long-term interests by intentionally derailing PhonePe's acquisition of IndusOS, a deal that all three OS Labs founders continue to think is in their company's best long-term interests,” stated Sameer Nigam, Co-founder, PhonePe.