Eight of Paytm’s officials and directors, current as well as former, have settled the case with the markets regulator
Securities and Exchange Board of India (SEBI) initiated an inquiry into fintech major an year ago
The officials collectively paid a cumulative sum of INR 3.32 Cr, without admitting or denying the findings of SEBI, to settle the case
About a year after the Securities and Exchange Board of India (SEBI) initiated an inquiry into fintech major Paytm, eight of its officials and directors, current as well as former, have settled the case with the markets regulator.
Here’re the names and the then designations of these officials and directors:
- Amit Khera – Compliance officer and company secretary (Resigned in March 2023)
- Ashit Ranjit Lilani – Independent director (Still on Paytm’s board)
- Neeraj Arora – Independent director (Left Paytm on June 17, 2024.)
- Douglas Feagin – Non-executive nominee director (Resigned on February 3, 2023.)
- Munish Varma – Non-executive nominee director (Resigned on March 15, 2022.)
- Ravi Chandra Adusumalli – Non-executive nominee director (Still on Paytm’s board)
- Mark Schwartz – Independent director (Retired on August 27, 2022.)
- Pallavi Shardul Shroff – Independent director (Still on Paytm’s board)
The aforementioned individuals paid a cumulative sum of INR 3.32 Cr, without admitting or denying the findings of SEBI, to settle the case.
Lilani was alleged to have failed to ensure compliance in “letter and spirit” to SEBI’s Regulation 6 (2) of LODR Regulations, 2015, which outlines listing compliances’ that are needed to be followed when going for an IPO. He paid INR 53.62 Lakh.
Independent directors Arora and Adusumali, in the show cause notices issued to them, were alleged to have failed in discharging their duties with “unbiased and independent approach” while taking decisions in the matter of ESOPs allotted to CEO and MD Vijay Shekhar Sharma and his relatives. For this, they paid INR 53.62 Lakh and INR 42.90 Lakh, respectively, to settle the case.
Further, SEBI alleged that Schwartz, Shroff, Feagin, Varma and ex-compliance officer Khera misrepresented Paytm’s promoter position at the time of filing for Paytm’s IPO.
The markets regulator said that the board of directors authorised and signed offer documents containing incorrect statements and incomplete disclosures which said the company was professionally managed and had no identifiable promoter, whereas Paytm’s promoter was Sharma. For this, each of the aforementioned people, barring Khera, paid INR 42.90 Lakh. Khera paid INR 11.50 Lakh to settle the case.
Last year, Paytm received multiple notices from SEBI. On July 19, the fintech major received a show cause notice from the market regulator in relation to the 2.1 Cr ESOPs issued to Sharma in the financial year 2021-22 (FY22).
A month later, the regulator sent show cause notices to Sharma and other board members, who served during Paytm’s IPO, for alleged misrepresentation of facts in the prospectus. Back then, the company clarified that it was in “regular communication” with SEBI and making necessary representations regarding this matter.
On the financial front, the fintech major turned profitable in Q2 FY25posting a net profit of INR 930 Cr as against a loss of INR 292 Cr in the year-ago period. The profitability came on the back of the company selling its ticketing arm Paytm Insider to Zomato for INR 2,048 Cr in the September quarter.
In the December quarter, Paytm sold its stock acquisition rights (SARs) in Japanese digital payments firm PayPay Corporation for INR 2,364 Cr ($279.19 Mn) to SoftBank’s Vision Fund 2.
The company is set to disclose its financial numbers for Q3 FY25 on January 20.
Shares of Paytm ended Friday’s trading session almost flat at INR 895.25 on the BSE.
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