People make investments with the expectation that they will receive returns from them. However, things become complicated when they are denied these returns. Allegedly, something similar happened with digital payments start-up Paytm, which has been accussed of not allotting shares to a former Paytm director. This affair may have a swift conclusion, as a Delhi court has now given the police a deadline of three weeks to finish the investigation into the claims.
“I am directing them to conclude the inquiry as soon as possible,” said Metropolitan Magistrate Animesh Kumar. The police have already submitted a status report to the court. The case will again be heard on September 13.
The director in question is US-based Ashok Kumar Saxena, who claims to have invested $27, 500 in Paytm’s parent company One97 Communications but did not receive the shares that were owed to him (a stake of 55% according to an agreement allegedly signed in September 2001).
“However, in spite of the written agreement and taking advantage of the client’s busy work schedule in the US, and his inability to follow up and remotely supervise all your actions pertaining to the company, you failed to allot the shares to our client or to appoint the third director nominated by him under some dubious pretext. You also failed the share the statement of account of the company with the client as agreed or to repay the loans of our client,” read a notice by law firm AugustLegal this February.
Saxena has tried to halt the IPO of Paytm as well, urging SEBI to prevent it from going forward with the initial public offering (IPO).
For its part, the SoftBank-backed Paytm denied that Saxena was a co-founder and that his claim amounted to harassment, citing it under “criminal prospectus.” The alleged agreement was called by Paytm as merely a “letter of intent” and that it did not materialize into any definitive agreement.
It is speculated that this controversy could adversely affect the IPO of Paytm.