Vijay Shekhar Sharma apparently enjoys the rights of a promoter without responsibilities.
One97 Communications, the parent company of Paytm, on Monday said that it has not received any new notice from the Securities and Exchange Board of India (SEBI), adding that the company already disclosed this in its latest annual financial results.
In a statement to IANS, Paytm said it has addressed the matter through preliminary response, and is in regular communication with SEBI, making necessary representations regarding on the matter.
The company further stated that it made relevant disclosures relating to SEBI's notice in its financial results for the quarter and year ended March 31, 2024, as well as the quarter ended June 30, 2024.
"The company received the notice during the quarter ending March 2024, and has already addressed the matter through making a preliminary response," a company spokesperson added.
Paytm said it is currently in the process of seeking further information from SEBI regarding this matter.
Based on an independent legal opinion obtained by management, the company believes it is compliant with the relevant regulations, its auditor's review report stated.
In a stock exchange filing, Paytm said it is in regular communication with the markets regulator on the matter.
"The Company (Paytm) 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 stated.
Multiple reports earlier mentioned that SEBI has issued new show-cause notices to Paytm Founder and CEO, Vijay Shekhar Sharma, and erstwhile board members of One 97 Communications Ltd, over alleged misrepresentation of facts during the company's initial public offering (IPO) in November 2021.
Paytm shares declined as much as 9 per cent during the intra-day trading and closed 4.48 per cent down at Rs 530 apiece. The average of 12-month analyst price targets implies a potential downside of 16 per cent.
Sharma is the founder and CEO of One97 Communications Ltd, but is not classified as promoter, according to stock exchange disclosures.
As a non-retiring director, Sharma chairs the company's board and has the right to a board seat if he holds at least 2.5 per cent stake. He would've also not been granted the ESOPs had he been classified as a promoter.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)