Lawsuits Against IPO-bound Companies Creating Uncertainty
- ByAyushi Ray | August 17, 2021
Lawsuits against IPO-bound companies creating uncertainty. While the aggrieved parties accuse the companies of breach of contracts or non-payment of dues, the companies feel these are attempts at creating hurdles in their IPO plans and arm-twist them to agree to somew settlement. Reuters reported on Friday about an unusual hurdle before Paytm’s $2.2 billion share sale, with a 71-year-old former director urging the markets regulator to stall the offering, alleging he is a co-founder who invested $27,500 two decades ago but never got shares. In legal documents seen by Reuters, Paytm said the claim by Ashok Kumar Saxena and his allegations of fraud in a police complaint in New Delhi are mischievous attempts to harass the company.
Saxena has approached the Securities and Exchange Board of India (Sebi) to stall the IPO, arguing investors could lose money if his claim is proved right, Reuters reported. “There is no ongoing court case or police investigation against the founder and the company or any of its subsidiaries in regards to this issue. The company has also not received any communication from Sebi on this. The company believes that there is no merit in this issue, and that this will not impact its IPO in any way,” said a person aware of the development, speaking on the condition of anonymity. No official words have been received from Paytm.
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