Paytm Share: Market regulator Securities Exchange Board of India (SEBI) has issued a show cause notice to Vijay Shekhar Sharma, founder of Paytm’s parent company One97 Communications Limited, and people who were board members at the time of the IPO. According to a Money Control report, this notice is related to the case of presenting incorrect information. Paytm’s IPO came in November 2021. Let us tell you that the company’s shares have seen a huge decline on Monday. Paytm shares have fallen by 9 percent compared to Friday’s closing.
What is the matter?
This notice issued to Paytm is related to the matter of allegedly not following the promoter classification rules. According to the report, this investigation was started on the basis of inputs received from the Reserve Bank. Let us tell you, after investigating Paytm Payments Bank, the Reserve Bank took strict action earlier this year.
What is there in SEBI’s notice?
According to the report, the main point of SEBI’s notice is whether Vijay Shekhar Sharma should have been introduced as a promoter. When the company’s IPO came, he also had the control of the management instead of just being an employee. That is why SEBI has also issued a notice to the directors of that time. In its notice, SEBI has questioned those people why they supported this move of Vijay Shekhar Sharma. According to SEBI rules, if Vijay Shekhar Sharma was introduced as a promoter, he would not have been eligible for Employee Stock Options (ESOPs).
The company got work worth Rs 1079 crore, shares were looted, price jumped by 9%
According to SEBI rules, until a company is declared as professionally managed, it is considered to be run by the promoter. To be professionally managed, no shareholder of any company should have more than 10 percent stake nor should a single shareholder have control.
Heavy fall in Paytm shares
Today, Paytm’s shares opened at Rs 560 on BSE with a gain compared to Friday’s closing. After some time, the company’s shares reached an intra-day high of Rs 565.45. However, after this, a huge decline has been seen in the shares. Compared to Monday’s intra-day high, the shares reached an intra-day low level of Rs 505.25 after falling by 11.91 percent.
