Paytm share price fell to day’s low of ₹505.55 per share on NSE today (August 26) after the company’s founder Vijay Shekhar Sharma and board members faced show cause notice from SEBI over IPO violations.
The market regulator issued a show cause notice to Vijay Shekhar Sharma and board members who served during the initial public offering (IPO) in November 2021 for alleged misrepresentation of facts, Moneycontrol reported.
A person close to the matter told the outlet, “SEBI is of the view that Sharma should have been classified as a promoter, and it was also the duty of the company’s board members to verify the accuracy of the claims made by the founder.”
The source said that “Although SEBI has taken action against company directors in the past, they were mostly financial fraud cases,”. This is one of those rare cases where SEBI is trying to hold directors responsible for potential compliance lapses, which were not even pointed out by bankers or statutory auditors.
Paytm’s share price fell 8.88 per cent to ₹505.55 per share on NSE.
According to BSE, Paytm shares have fallen 18.17 percent this year. In the last one year it has given negative returns of 41.20 percent.
This comes after the Reserve Bank of India (RBI) banned PPBs 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.
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