Ashok Kumar Saxena, a former director in Paytm’s parent company One 97 Communications, is now urging India’s market regulator to stall the digital payments giant’s $2.2 billion initial public offering (IPO ).
Saxena alleges that he is the co-founder of One 97 Communications and had invested about $27,500 in the company about two decades ago. However, the company never transferred his 55% shareholdings to him, as per Saxena.
At the centre of the argument is a one-page document signed by Saxena and Paytm founder and chief executive Vijay Shekhar Sharma in 2001. The document reportedly highlights that Saxena would get a 55% equity stake in Paytm's parent company One 97 Communications. The remaining 45% equity shares would be owned by Sharma.
The former director of the company had reached out to market regulator Securities and Exchange Board of India (SEBI). Prior to this, Saxena had also filed a police complaint against Paytm in New Delhi.
The matter has also reached a New Delhi court, where Saxena has urged the judge to direct the local police to register a case on his complaint. The court had ordered the police to respond and the matter will be heard on August 23.
The development was first reported by Reuters.
Paytm, in a legal document submitted to the Delhi Police, claimed Saxena's allegation against Paytm are attempts to harass the company. Therefore, the company had listed the dispute under 'criminal proceedings' in its draft red herring prospectus (DRHP) for its IPO.
Paytm in the documentation also agreed that Saxena was one of the first few directors in the company who served between 2000-2004. However, the company has denied that Saxena was the co-founder of One 97 Communications. The document was accessed by Reuters.
Business Insider has reached out to Paytm seeking comments. We will be updating the copy if and when we receive a response.
The digital payments giant in the filing states that Saxena did extend funds to the company, however, he gradually “lost interest”. The company also emphasised that the letter being referred above was merely a “letter of Intent” and not a formal agreement. Paytm has also mentioned this in its legal statement to the police.
Saxena had started disassociating himself from the company after the document was signed and stopped attending board meetings, Paytm said in the legal statement. Therefore, the intent never reached a full agreement.
Paytm in the legal document also stated that Paytm and Saxena had reached a private understanding and transferred the shares to an Indian firm. Saxena said he had never received any shares and there was no misunderstanding.
"The shares and money are one thing, but I also want to be recognised as the co-founder," Saxena told Reuters.
SOURCE : BUSINESSINSIDER
