The 71-year-old former director fought the road to Paytm’s IPO, this is the whole matter

Paytm’s IPO: The initial public offering (IPO) of Rs 16,600 crore ($ 2.2 billion) of digital payment and financial services company Paytm has come in the way. A 71-year-old former direct has urged India’s market regulator to stop the IPO, alleging this. He alleges that he is the co-founder of the company and had invested $27,500 in the company two decades ago, but never got the shares.

According to Reuters, Paytm said that Ashok Kumar Saxena’s claim is fake and has filed a case of exploitation of the firm against him at a Delhi police station. Paytm had applied for IPO with the regulator in July. Saxena denied harassment and said that Paytm is in a high-profile position, which means a private person like him is not in a position to harass the company.

The matter reached SEBI

Saxena has approached market regulator SEBI to stop Paytm’s IPO. If their claim turns out to be true, investors could lose their money. However, SEBI has not given any statement in this matter yet.

Sriram Subramaniam of shareholder advisory firm InGovern said the controversy could lead to the regulator ordering a probe and making it difficult or delayed to approve Paytm’s IPO. The value of Paytm IPO can be up to $ 25 billion. Subramanian said SEBI will ensure that after listing, it does not affect the company and its shareholders.

Whatever the regulator decides, the controversy could turn out to be a legal headache for Paytm’s much-awaited IPO. Its investors are Alibaba of China and SoftBank of Japan.

What’s the matter?

At the root of the dispute is a one-page document signed between Saxena and Paytm’s billionaire CEO Vijay Shekhar Sharma in 2001. According to this, Saxena will get a 55 percent stake in Paytm’s parent company One97 Communications and the rest will be owned by Sharma. Paytm declined to comment on the matter. Sharma also did not reply.