3 days Ago
Paytm shares are likely to be in focus on Thursday after the company’s founder, Vijay Shekhar Sharma, his brother Ajay Shekhar Sharma, and One97 Communications agreed to pay a total of Rs 2.79 crore to settle a case with Sebi. The market regulator had accused them of misrepresenting facts and violating shareholder classification norms.
Vijay had identified himself as a non-promoter when One97 Communications (the parent company of Paytm) filed for its IPO—a move that enabled him to receive employee stock options. However, Sebi rules prohibit the granting of ESOPs to promoters.As part of the settlement, Vijay has voluntarily surrendered 21 million stock options granted in 2019.
His brother Ajay has given up 225,000 options and agreed to disgorge Rs 35 lakh to Sebi. Additionally, Vijay has agreed not to accept any fresh ESOPs for the next three years.The settlement mechanism is an out-of-court process where individuals or entities involved in regulatory breaches resolve the matter with Sebi—without admitting or denying guilt—by paying a penalty or taking corrective action.
Sebi communicated the settlement terms to the three parties last month, giving them a month to comply. Following this, Sebi is expected to issue a formal settlement order, said a person familiar with the matter. Sebi did not respond to ET’s query.
Paytm also declined to comment on an ET query sent on Wednesday.Later in the day, One97 informed stock exchanges that its board held a meeting on Wednesday—from 5:05 pm to 5:18 pm—during which it was disclosed that Vijay had voluntarily forgone all 21 million ESOPs granted to him in 2019, with immediate effect.“.
..the NRC has consequently treated the unvested ESOPs in question as cancelled and the same have been returned to the ESOP pool under the One97 Employees Stock Option Scheme, 2019,” the company said.
This will result in a one-time, non-cash acceleration of ESOP expense amounting to Rs 492 crore in Q4 FY25 and an equivalent reduction in ESOP expenses in future years, the fintech major added.Finsec Law Advisors represented One97, while Regstreet Law appeared for the Sharma brothers.The case centred on whether Vijay should have been classified as a promoter instead of an employee during the IPO process.
In 2021, he held a 14.7% stake in the company, which he later reduced to below 10% by transferring 30.9 million shares to Axis Trustee Services on behalf of the Sharma Family Trust—technically making him eligible for ESOPs.
Sebi also raised concerns about the role of independent directors who supported Vijay’s classification.In the previous session, Paytm shares closed 3% higher at Rs 864.5.
The stock has declined 12% year-to-date but has gained 120% over the last 12 months. The company’s market capitalisation stands at Rs 55,141 crore.Also Read: Stocks in news: Infosys, Jio Financial, Wipro, ICICI Bank, SpiceJet(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own.
These do not represent the views of the Economic Times).
