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00:00And now we are joined by Mr. Sriram Subramaniam, MD and founder of InGovern.
00:04Mr. Subramaniam, good evening. Thank you very much for joining us on the show.
00:07Now, Mr. Subramaniam, what is your view of what's happened? Of course,
00:11at the heart of the matter is whether Vijay Shekhar Sharma should be classified as a promoter
00:16or an employee while filing the IPO documents. So how do you see this and what do you see as its
00:22impact now? Firstly, this IPO happened almost three years ago and the RHP, that is the draft,
00:32would have been filed with SEBI and the lawyers of the merchant bankers and other due diligence
00:40itself would have gone through the legal process of scrutinizing the classification,
00:46of scrutinizing the shareholding of various entities, including Vijay Shekhar Sharma.
00:50From at that time, the norms which were prevalent were any single entity holding more than 10%
00:58should be classified as promoter. Anyone holding below 10% should be classified as a non-promoter
01:04and that's how Vijay Shekhar Sharma was classified as a non-promoter because I think at that time he
01:10held less than 10%. But subsequently, one is, is SEBI right in now looking retrospectively
01:20three years back and seeing whether they only approved that IPO. So from that perspective,
01:25did they scrutinize the papers properly? So this brings to the question, can they look back and
01:31declassify now retrospectively? The entire issue again became as to whether when Paytm started
01:38issuing ESOPs, one of the, this one was Vijay Shekhar Sharma himself. So to that extent,
01:44whether ESOP should be issued, that's a second matter. But a third matter is SEBI itself has
01:49floated a paper, a discussion paper saying that they need to move, Indian markets need to move
01:56away from the definition of promoter to persons in control. So to that extent, I think the concept
02:04of promoter itself has outlived its usefulness. India is one of the few markets in the world to
02:09have this definition of promoter. So it's not clear as to what is the promoter role doing in
02:17that sense. And SEBI itself has been devolving its own definition. So to that extent, the thinking
02:23has been changing. So it is, it would be interesting to see whether SEBI will now revisit
02:29what it only approved three years ago. Right, absolutely. So in a sense, this perhaps is an
02:36attempt by SEBI to hold directors responsible for more, you know, for potential compliance issues.
02:42Now, as far as the company is concerned, this is sort of another setback to them in terms
02:50from the regulators as well. So how do you see this going forward for them?
02:54I wouldn't think this is as big a setback as the RBI action, for example. This, if anything,
03:02puts the spotlight on SEBI itself. SEBI approved the IPO prospectus, right? And at that time,
03:09the classification, if Paytm had incorrectly disclosed, that is a different thing. But Paytm
03:16has disclosed all the data or I would think has disclosed in the draft rating prospectus correctly
03:24and lawyers and other lawyers of the merchant bankers, et cetera, would have done the scrutiny
03:32of the classification. So to that extent, if SEBI has to censure Paytm, it also has to censure
03:38itself because it has to pull up its own officers who get the approval for the IPO then.
03:44So you see this as quite a double-edged sword over there. Mr. Subramaniam,
03:48I appreciate your joining us on the show. Thank you.
03:50Yeah, because retrospectively it changes, right? I mean,
03:54they only approved it and now they can't go back and change it retrospectively.
03:59All right. Thank you very much for joining us on the broadcast.