Fintech major Paytm received a show-cause notice from the Securities and Exchange Board of India (Sebi) over stock options granted to the company’s founder and chief executive officer Vijay Shekhar Sharma in the financial year 2022 (FY22), according to an exchange filing.
The show-cause notice is in relation to the company granting 21 million Employee Stock Options (ESOPs) to Sharma, which are tied to specific milestones the firm achieves.
“During the previous quarter, the company had received a show-cause notice (SCN) from Sebi related to the above options regarding compliance with SEBI SBEB (Share Based Employee Benefits) Regulations. The company has submitted its preliminary response and is in the process of seeking further information from Sebi in this regard,” the company said.
The Noida-based company said the show-cause notice did not have any impact on the financial results of the fourth quarter of the financial year 2024 (Q4 FY24) and Q1 FY25.
The development comes a few days after the company received an administrative warning from the markets regulator with regard to related-party transactions.
The firm and its subsidiaries processed two transactions — services taken by One97 Communications (OCL) from Paytm Payments Bank and services to the bank from the company in 2021-22 (FY22) — allegedly without approval from its shareholders or the audit committee. The amounts in the two transactions have been estimated at Rs 324 crore and Rs 36 crore, respectively.
In response to the warning, Paytm had stated that it has “consistently acted in compliance”.
“The company is committed to upholding and demonstrating the highest compliance standards and shall also submit its response to Sebi. There is no impact on financial, operational, or other activities of the company pursuant to the above-mentioned letter,” the firm said in a statement.
First Published: Jul 19 2024 | 7:35 PM IST
