Paytm’s founder and board members face show-cause notices over alleged violations.
In a major setback for Paytm, the Securities and Exchange Board of India (SEBI) has issued show-cause notices to the company’s founder, Vijay Shekhar Sharma, and its board members for alleged misrepresentation of facts during its initial public offering (IPO) in November 2021.
The market regulator is investigating claims that Sharma’s promoter status was incorrectly disclosed and that board members failed to verify the accuracy of the information provided. This is a rare instance where SEBI is holding directors accountable for potential compliance lapses.
As news of the SEBI investigation broke, Paytm’s shares plunged by nearly 9% on the National Stock Exchange (NSE), further exacerbating the stock’s already significant decline of 18.17% year-to-date.
