Paytm founder gets nearly 100% votes to remain MD

MUMBAI

: Around 99.7% of the shareholders of Paytm‘s parent, One97 Communications, have voted in favour of a resolution to reappoint Vijay Shekhar Sharma as MD & CEO of the company and approved his remuneration. Other resolutions, including the reappointment of Ravi Chandra Adusumalli and Madhur Deora on the board, have also been approved with an overwhelming majority of votes in favour.
Three proxy advisory firms had advised shareholders to vote against resolutions for the appointment of directors. These firms were Institutional Investor Advisory Services, Stakeholder Empowerment Services and InGovern Research. The advisories came in the wake of a 64% drop in the market price of Paytm’s shares from the IPO level during the meltdown of startup stocks early this year. Large institutional investors often take the support of advisory firms to decide which way to vote on shareholder resolutions in companies where they have a stake.
Sharma has been steadfast in his communication that, while the company cannot control the share price, business is on anticipated lines and it is on track for profitability. “Business is booming, and we are on target to achieve profitability. Our marketing and acquisition costs have dropped significantly. Our business model is very clear – to acquire payment customers and distribute loans,” said Sharma.
“We use the payment service to acquire customers and leverage the distribution of the Paytm app to grow, while we also grow our merchant network. Our user base of 75 million transacting users allows us to have a distribution and collection model that is not possible for other lenders with their current margins.”
The company has refuted charges by the advisory firms. It said that Adusumalli had nominated Vivek Mathur, operating partner at Elevation Capital, to attend meetings at short notice that he could not attend because he was in the US. “The resounding votes of almost 100% in favour of his reappointment reflects investors’ faith in the company’s leadership and shows that they remain confident about its growth and profitability target. Earlier in May 2022, the One97 Communications board had approved the reappointment of Sharma as MD,” the company said. “Additionally, Sebi, in February 2022, had made it voluntary for India Inc to have a separate chairperson and MD / CEO. In most Nifty 50 companies, the MD is appointed on a non-rotational basis,” it added.