Indian police will conduct an investigation into claims from Ashok Kumar Saxena, 71, a former Paytm director who said he co-founded the digital payment platform but did not receive shares owed.
The investigation has the potential to delay the forthcoming IPO of Paytm. Paytm is backed by Chinese e-commerce leader Alibaba Group Holding. The value of Paytm is up to $25 billion.
Ashok Kumar Saxena in legal documents said he invested $27,500 two decades ago in Paytm parent One97 Communications but was never allotted any stock, Reuters reported.
Paytm said the claim amounts to harassment and cited it under criminal proceedings in the prospectus for its proposed $2.2 billion initial public offering (IPO). Ashok Kumar Saxena, a director from 2000 to 2004, has written to the market regulator urging it to stop Paytm from proceeding with the IPO.
A document dated 2001 and signed by Ashok Kumar Saxena and current Paytm Chief Executive Officer Vijay Shekhar Sharma, stated that Ashok Kumar Saxena was to own 55 percent stake of One97 Communications with Vijay Shekhar Sharma owning the remainder.
Paytm, in a response to a police notice, denied Ashok Kumar Saxena was a co-founder and said the document in question was “merely a letter of intent” which “did not materialise into any definitive agreement.”
On Monday, a Delhi district court judge requested the final report of the police’s investigation within three weeks.