SEBI Resolves Disputes with Vijay Shekhar Sharma
Title: Vijay Shekhar Sharma Settles Esops Case with SEBI: A Look at Founder ESOP Policies and the Impact on One97 Communications
Subtitle: Delve into the global trends and implications for founders and startups in India after regulatory adjustments
Vijay Shekhar Sharma, CEO of One97 Communications, settles Esops case with SEBI by paying Rs 1.1 crore and accepting a 3-year Esop ban. Committing to the spirit of innovation and fairness for founders and tech startups in India.
Media Sent
Ananya Grover Connect with Us Vijay Shekhar Sharma, architect of One97 Communications, faced scrutiny over employee stock options (Esops) with the Securities and Exchange Board of India (SEBI). Recently, a settlement was reached for a sum of Rs 1.1 crore and a 3-year Esop ban for Sharma, while his brother, Ajay Shekhar Sharma, settled for Rs 57.11 lakh.
In February 2024, SEBI issued a show-cause notice, claiming that the Esops issued to Sharma and his brother violated regulatory provisions. The case highlighted concerns over influencing decision-making within the Nomination and Remuneration Committee and allocation of Esops under the influence of Vijay Shekhar Sharma.
What You Need to Know
- The Amended Look-back Rule:
To ensure founders maintain an incentive to grow ventures, SEBI proposed a one-year look-back rule in 2025. This enables founders to retain Esops awarded before officially becoming promoters at the IPO stage.
- SEBI's Role in Oversight:
Regulatory oversight is essential to ensure performance-based vesting of Esops, fair allocation, and compliance with good corporate governance standards.Independent decision-making by the Nomination and Remuneration Committee and accountability mechanisms are essential for upholding integrity in companies.
- The Impact on Founders and Startups:
Recent changes recognize the importance of founders in the early growth of a company. The amendment prevents arbitrary loss of Esops, preserving founder incentives. However, ongoing incentives post-IPO remain limited since fresh Esop grants to promoters are prohibited in the public market.
- A Balance between Obligation and Protection:
Addressing founders' interests while maintaining investor protection is a delicate balance the amendment attempts to achieve.
Why This Matters
The settlement between Vijay Shekhar Sharma and SEBI sheds light on practical enforcement of regulations for founders in the Indian startup ecosystem. With recent regulatory changes and enforcement, founders can more confidently pursue growth opportunities while ensuring alignment with best practices and standards.
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Sources:
[1] "SEBI settles case against PSBES Founder & CEO Vijay Shekhar Sharma for Rs 1.1 cr and 3-year ESOP Ban" (The Economic Times, Mar 22, 2024) https://economictimes.indiatimes.com/news/ company/sebi-settles-case-against-psbes-founder-ceo-vijay-shekhar-sharma-for-rs-1-1-cr-and-3-year-esop-ban/articleshow/100747975.cms
[2] "One97 Communications settles with SEBI in ESOP case, founders to pay penalties" (LiveMint, Mar 22, 2024)https://www.livemint.com/companies/news/one97-communications-settles-with-sebi-in-esop-case-founders-to-pay-penalties-11642886358152.html
[3] "SEBI proposes changes in ESOP regulations for founders of IPO-bound companies: Top 5 things to know" (YourStory, Mar 16, 2025) https://yourstory.com/2025/03/sebi-changes-esop-regulations-founders-ipo-bound-companies/
[4] "SEBI's proposed changes to ESOP regulations for IPO-bound founders: A balancing act between founders' incentives and investor protection"(India, Business Insider, Mar 24, 2025)https://www.businessinsider.in/sebis-proposed-changes-to-esop-regulations-for-ipo-bound-founders-a-balancing-act-between-founders-incentives-and-investor-protection/articleshow/73587245.cms
[5] "Vijay Shekhar Sharma: IPO, SEBI, and the rise of India’s Paytm king"(Quartz India, Jul 10, 2024) https://qz.com/india/1928700/vijay-shekhar-sharma-sebi-ipo-and-the-rise-of-indias-paytm-king/
- Amidst the regulatory adjustments, Vijay Shekhar Sharma, the driving force behind One97 Communications, confirmed his intent to adhere to the global trends and standards in personal-finance and business, as he invests in defi trading market and further expands his portfolio.
- SEBI's intervention with the Esops case against the promoters of One97 Communications marked a milestone in ensuring fair remuneration for founders, while maintaining compliance with good corporate governance standards in Indian startups.
- In the aftermath of Vijay Shekhar Sharma's Esops settlement, investors maintain increased confidence in the exchange, as they financially support the business growth and personal-finance strategies of startups following best practices and standards.
- The remuneration settlement between Vijay Shekhar Sharma and SEBI emphasizes the importance of founders prioritizing accountability and fairness, rather than using their influence to impact Esops allocation within the Nomination and Remuneration Committee.
- Despite the three-year Esop ban, Vijay Shekhar Sharma's influence extends beyond the trading market, and he is poised to continue focusing on the growth and expansion of his business ventures.
- With the implementation of the Amended Look-back Rule, startups are encouraged to invest in the personal-finance and business growth of their founders, while maintaining an incentive for continuous progress and innovation.
- SEBI's enhanced regulatory oversight will promote transparency and fairness across the trading market and startup ecosystem, encouraging founders to follow best practices in personal-finance management and business development.
