The company’s share price fell to an intraday low of ₹ 505.55 per share on NSE today (August 26) after Paytm founder Vijay Shekhar Sharma and board members received a show-cause notice from SEBI over IPO violations.
The market regulator has issued a show-cause notice to Vijay Shekhar Sharma and board members who served on the firm during its initial public offering (IPO) in November 2021, for allegedly misrepresenting facts, reports Moneycontrol.
“Sebi believes that Sharma should have been classified as a promoter, and that the company’s board members also had a duty to verify and certify the veracity of claims made by the founder,” said a person familiar with the matter.
“Though Sebi has gone after the company’s directors in the past, they have mostly been in cases of financial fraud. This is one of the rare cases where Sebi is trying to hold directors accountable for potential compliance lapses that were not even pointed out by bankers or statutory auditors,” the source said. Paytm shares fell 8.88 per cent to Rs 505.55 on NSE.
According to BSE, Paytm’s stock has fallen 18.17 per cent this year. It has given a negative return of 41.20 per cent in the last one year. This happened after the Reserve Bank of India (RBI) imposed restrictions on PPB on January 31 this year due to “persistent non-compliance and ongoing significant supervisory concerns”. RBI directed PPBL to shut down most of its operations, including deposits, credit products and digital wallets, by March 15 this year.
