Paytm shares rose 3 per cent after the fintech company issued a clarification on the media news saying “Vijay Shekhar Sharma, Paytm directors face Sebi show-cause notices over IPO breaches”.
“With reference to recent media reports, we would like to inform you that this is not a new development, as the Company had already made relevant disclosures on this matter in its financial results for the quarter and year ended March 31, 2024, as well as the quarter ended June 30, 2024. The Company is in regular communication with the Securities Exchange Board of India (SEBI) and making necessary representations regarding this matter. Accordingly, there is no impact on the financial results for previous quarters ended June 30, 2024, and March 31, 2024, respectively,” the company said in a filing to the exchanges.
Additionally, according to sources close to the development, Sharma has sought to settle a securities law violation case with the market regulator.
The regulator issued a show-cause notice to Sharma for an alleged violation of employee stock option plan rules. Entities have 60 days from receiving a show-cause notice to file for settlement.
In response to an exchange query, Paytm stated on Monday that the company is in regular communication with Sebi and has made the necessary representations. The company noted that in 2021-22, it granted 21 million employee stock options (ESOPs) to Sharma as its Chief Executive, contingent on the achievement of specified milestones.
Media reports stated that Vijay Shekhar Sharma and other board members faced show-cause notices from the SEBI for alleged misrepresentation of facts. The notices were concerning Sharma’s alleged ineligibility as the promoter.
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