Digital Scoop India Official Platform of Digital Scoop India Featuring Latest & Best News #Articles #Bytes #Entertainment #DigitalScoopMagazine
Related Articles
Paytm’s founder and CEO, Vijay Shekhar Sharma, has settled a case with the Securities and Exchange Board of India (SEBI) over violations concerning employee stock options (ESOPs). The case, which stemmed from Sharma’s receipt of 21 million ESOPs, was settled with both Paytm and Sharma agreeing to pay a fine of ₹11.1 million each.
In August of last year, SEBI concluded that Sharma’s grant of these ESOPs violated the regulatory framework governing share-based employee benefits. According to Indian regulations, large shareholders who hold the ability to influence company decisions are not allowed to accept ESOPs. This is meant to ensure fairness and transparency in the distribution of employee stock benefits.
As part of the settlement, Sharma has agreed not to accept new ESOPs from any listed company for the next three years. The settlement also resolves an ongoing investigation into the matter, which had caused concern in the Indian financial markets. Both Paytm and Sharma faced scrutiny after the violation came to light.
Sharma’s relationship with Paytm’s employee stock options began years ago. Before Paytm went public in 2021, Sharma owned a 14.7% stake in the company. To qualify for the ESOP grants, he reduced his holding to 9.1%, transferring 30.97 million shares to Axis Trustee Services, which managed the Sharma family trust.
In response to the violation, Sharma relinquished the ESOPs last month. This move led to Paytm recording a significant one-time charge of ₹4.92 billion in the previous quarter, reflecting the impact of the issue on the company’s financials.
This settlement is the latest chapter in Paytm’s ongoing regulatory and financial challenges, which come at a time when the company continues to navigate its position in India’s competitive fintech sector.
Sources By Agencies
