Paytm's ex-Director seeks to stall $2 billion of its IPO

Paytm's $2.2 billion IPO is facing an unusual hurdle - a 71-year-old former Director, Ashok Kumar Saxena has urged India's markets regulator to stall the offering, alleging he is a Co-Founder who invested $27,500 two decades ago but never got shares.

Paytm says the claim by Ashok Kumar Saxena and allegations of fraud in a police complaint in New Delhi are mischievous attempts to harass the firm. The dispute though is cited under "criminal proceedings" in Paytm's July IPO prospectus filed for regulatory approval. Saxena denied harassment and said Paytm had a high profile position that meant a private individual like him was not in a position 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, according to a previously unreported complaint seen by Reuters.

Shriram Subramanian of shareholder advisory firm InGovern said the tussle could spark regulatory inquiries and complicate or delay the approval of Paytm's IPO that could value it at up to $25 billion.

Irrespective of what the regulator decides, the dispute could become a legal headache ahead of the much-awaited IPO of Paytm, which counts China's Alibaba and Japan's SoftBank among its investors.

At the heart of the dispute is a one-page document signed between Saxena and Paytm's billionaire CEO, Vijay Shekhar Sharma, in 2001, saying Saxena was to get a 55% equity stake in Paytm's parent, One97 Communications, with Sharma owning the rest.