Paytm Settles ESOP Violations With SEBI, Founder Banned

Paytm and its founder Vijay Shekhar Sharma have settled a case with the Securities and Exchange Board of India (SEBI) concerning violations related to employee stock ownership plans (ESOPs). Under the settlement, Sharma is barred from accepting fresh ESOPs from any listed company for three years, and ESOPs worth Rs 2.10 crore linked to him have been cancelled. His brother, Ajay Shekhar Sharma, also had ESOPs worth Rs 2.22 crore cancelled, with the settlement amounting to over Rs 1.68 crore combined. The case arose due to Sharma receiving ESOPs prior to Paytm’s initial public offering, which SEBI contended violated regulations prohibiting promoters from being issued ESOPs. Paytm had already accounted for a one-time non-cash ESOP expense of Rs 492 crore following Sharma's voluntary decision to forgo his ESOPs. SEBI confirmed it will not pursue further enforcement actions against the individuals involved following the settlement.