Business: The troubles of One97 Communications, the parent company of Paytm brand, are not ending. In the latest development, capital market regulator SEBI has issued show cause notices to Vijay Shekhar Sharma and Paytm directors in the IPO violation case. According to a Moneycontrol report, the notices are related to Sharma's alleged non-compliance of promoter classification norms. The investigation was initiated based on inputs from RBI, which had investigated Paytm Payments Bank. After this, the company's shares fell by 8.88%..

This matter is related to November 2021

According to the news, the Securities and Exchange Board of India (SEBI) has issued show cause notices to Vijay Shekhar Sharma, founder of One97 Communications Ltd (Paytm's parent company) and board members who served during its initial public offering in November 2021, for allegedly misrepresenting facts. The notices relate to Sharma's alleged non-compliance with promoter classification norms. The investigation was initiated based on inputs from the Reserve Bank of India (RBI), which had investigated Paytm Payments Bank earlier this year, the people cited above said.

Shares closed at this price today

One97 Communications shares finally closed at Rs 530, down 4.48 per cent on the NSE. While on the BSE, the stock closed at Rs 530.05, down 4.41%. The report said that Sharma would have become ineligible for employee stock options (ESOPs) after listing, as SEBI rules bar promoters from receiving ESOPs after an IPO.

Sharma's stake drops below 10%

According to the report, in the case of Paytm, before filing the IPO documents, Sharma transferred his 5 percent stake to a family trust called VSS Holdings Trust. Prior to this transfer, Sharma owned 14.6 percent of One 97 Communication and after the transfer, Sharma's stake came down to 9.6% - slightly below the 10% limit specified in the rules.