Paytm Stock Crash: Paytm has informed the stock exchange today that the sharp fall in its shares came after reports that stock market regulator SEBI has issued a notice to Paytm directors. Paytm responded by saying that this is not a new development regarding the company’s managing director Vijay Shekhar Sharma. The company had made this disclosure while announcing the financial results for the March and June quarters.
Shares of Paytm’s parent company One97 Communications Limited fell today
The stock of Paytm’s parent company One 97 Communications Ltd fell sharply in the trading session of Monday, August 26 and the stock fell by about 9 percent to Rs 505.55. As soon as the news came that the stock market regulator SEBI has issued a notice to the company’s founder Vijay Shekhar Sharma, the Paytm stock fell sharply. Today, at the closing of the stock market, Paytm shares also fell sharply. Rs 24.85 or Closed at Rs 530 per share.
The news came from an English economic portal
According to a report by English economic portal Moneycontrol, SEBI (Securities and Exchange Board of India) had issued a show cause notice to Vijay Shekhar Sharma. Apart from Vijay Shekhar Sharma, notices have also been issued to those members of the company’s board who were involved in the IPO launched by the company in November 2021. According to the report, this notice was issued due to misrepresentation of facts and non-compliance of classification norms related to the promoter. The investigation was initiated on the basis of inputs received from the Reserve Bank of India, the regulator of the banking sector. The investigation was conducted on the point whether Vijay Shekhar Sharma should be considered an employee of the company or a promoter as he had management control while filing documents for the IPO.
What did Paytm say on SEBI’s notice?
On SEBI’s notice, One97 Communications has clarified that this is not a new development and the company had made this disclosure while announcing the financial results in March and June quarters.
Vijay Shekhar Sharma was not eligible for ESOPs at the time of IPO-SEBI
According to SEBI rules, Vijay Shekhar Sharma was not eligible for employee stock options (ESOPs) after the listing of the company because the promoters of the company cannot take employee stock options after the IPO. According to the report, SEBI, One97 Communications and the directors who were present on the board at the time of launching the IPO have not responded to the email.
After this news came out, Paytm’s stock fell 8.88 percent from the previous closing price level of Rs 554.85 to Rs 505.55. Currently, the stock is trading at Rs 526.60 with a decline of 5.09 percent. By the way, Vijay Shekhar Sharma has suffered many setbacks in the year 2024. First RBI’s action was seen on Paytm Payment Bank, now SEBI has issued a notice.
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