India’s markets regulator has issued a show-cause notice to senior Paytm executives over the timing of a December 2023 disclosure, amid tighter listing standards and questions over whether the information should have been treated as unpublished price-sensitive data.
India’s markets regulator has sent a show-cause notice to senior executives at One 97 Communications, the parent of Paytm, over whether a December 2023 disclosure was made at the right time and whether it should have been treated as unpublished price-sensitive information, according to an exchange filing cited by The Hindu BusinessLine. The notice, dated August 11, was received the same day and gives the recipients 14 days to respond.
The company said the notice was issued to its key managerial personnel, a group that would typically include chief executive Vijay Shekhar Sharma, chief financial officer Madhur Deora and other whole-time directors. Paytm said it does not expect any financial hit from the development, and stressed that a show-cause notice is only a request for an explanation rather than a finding of wrongdoing or a penalty.
The action centres on Paytm’s December 6, 2023 announcement that it was recalibrating its personal loan distribution business. At the time, the company said it was focusing more on higher-ticket lending for consumers and merchants through banks and non-banking financial companies, while reducing reliance on loans of less than ₹50,000. The stock fell about 20% after the update, coming roughly three weeks after the Reserve Bank of India tightened consumer lending norms.
The case also comes against a backdrop of stricter disclosure standards in India’s markets. SEBI has in recent years shortened timelines for listed firms to disclose certain material events, including arrangements involving promoters, directors, key managerial personnel and employees that could affect management or control. Against that backdrop, the regulator is now examining whether Paytm’s 2023 filing met the required standards and whether investors should have been told sooner.
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