Top executives of venture capital firms Saama Capital, Elevation Capital and Venture Highway, and law firm Shardul Amarchand Mangaldas & Co, who were on the board of Paytm parent One97 Communications Ltd when it went public in 2021, have settled a case with India's capital markets regulator for misrepresentation in the company’s IPO filings.
The Securities and Exchange Board of India (SEBI) had last year issued a show-cause notice to eight executives for approving and signing offer documents containing incorrect statements and incomplete disclosures that benefitted Paytm founder and CEO Vijay Shekhar Sharma and his relatives, and failing to conform with regulations for listed companies.
These eight include Elevation Capital founder and co-managing partner Ravi Chandra Adusumalli, Saama Capital founder and managing partner Ashit Ranjit Lilani, and Neeraj Arora, founder of Venture Highway that was acquired by American VC fund General Catalyst last year. Mark Schwartz, former chairman of Goldman Sachs Asia-Pacific, Ant Group's Senior Vice President Douglas Feagin, former SoftBank executive Munish Varma and Pallavi Shroff of Shardul Amarchand Mangaldas, the legal advisor to the company, was also among the people who received SEBI notices.
All these executives, along with Paytm’s former compliance officer Amit Khera, settled the case. Together, these eight people paid about Rs 3.32 crore to SEBI as part of the settlement.
Paytm, in its draft red herring prospectus filed with SEBI before its IPO in 2021, said it was a professionally managed company and that it did not have an identifiable promoter. Founder Sharma currently leads the digital payments company as the managing director and chief executive.
SEBI had questioned Sharma's ‘public shareholder’ classification in the company. Sharma had cut his shareholding in the company prior to the IPO that helped him retain employee stock options in Paytm, which company promoters are ineligible for.
