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Sebi bars Paytm's Vijay Shekhar Sharma from accepting Esops MODIFIED
Paytm founder and CEO Vijay Shekhar Sharma has been barred from accepting any fresh employee stock options (Esops) from any listed company for the next three years, according to a settlement order by the Securities and Exchange Board of India (Sebi).
Paytm parent One97 Communications, Vijay Shekhar Sharma, and the company's chief business officer (CBO) Ajay Shekhar Sharma have settled a matter with Sebi related to alleged lapses in Esop issuances.
One97 had given 21 million Esops to Vijay in October 2021 and 262,000 Esops to Ajay in May 2022, which Sebi found to be in violation of regulations.
Under the terms of settlement, One97 cancelled the Esops issued to the Sharma brothers and paid a settlement amount of ₹1.11 crore to Sebi.
Further, the settlement order details payment of ₹1.11 crore by Vijay and ₹57,11,000 by Ajay. Additionally, Sebi directed disgorgement of ₹35,86,000 from Ajay for the sale of around 3,720 shares of One97 obtained upon the exercise of the Esops. The market regulator had alleged that as the founder and managing director of One97, Vijay was in a position to influence the decision of the Nomination and Remuneration Committee (NRC) while approving grant of Esops to himself and his brother.
Sebi's allegations also say that the company made incorrect disclosures in the offer documents by disclosing Vijay as a non-promoter public shareholder.
The regulator added that Vijay created a scheme through arrangement of transfer of a portion of his equity in the company to a family trust controlled by him to continue to exercise control over more than 10 per cent equity and circumvent the Sebi regulations.
The family trust was created only a few days prior to the filing of the offer documents for the company's IPO.
The market regulator had sent show-cause notices to the company and Sharma brothers in February 2024 to which they filed separate settlement applications.
Earlier in April, the company had disclosed that Vijay had voluntarily foregone 21 million Esops. Modified content to test issue.
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