(Reuters) -India’s Paytm said on Wednesday founder and CEO Vijay Shekhar Sharma has foregone 21 million employee stock options granted to him, months after the country’s markets regulator issued show-cause notices over violation of rules on grant of share-based employee benefits.
Last August, the Securities and Exchange Board of India (SEBI) determined that the grant of 21 million employee stock options (ESOPs) to Sharma violated its rules governing share-based employee benefits.
As per Indian rules, large shareholders with ability to influence company decisions cannot hold ESOPs.
Sharma owned a 14.7% stake in Paytm a year before the company’s 2021 public filing. To become eligible for ESOP grants, he reduced his shareholding to 9.1% by transferring 30.97 million shares to Axis Trustee Services, which acted on behalf of the Sharma family trust.
SEBI had issued these notices to Sharma and other board members who held roles during Paytm’s November 2021 IPO over alleged misrepresentation of facts.
(Reporting by Kashish Tandon in Bengaluru; Editing by Anil D’Silva and Tasim Zahid)
