With Antfin‘s shareholding reducing to 9.90 per cent in One97 Communications Limited (OCL), which owns Paytm, its Founder and CEO Vijay Shekhar Sharma has become the sole Significant Beneficial Owner (SBO).
Antfin, which recently pared its stake in OCL from 23.79 per cent to 9.90 per cent, is no longer a SBO of the company, Paytm said in a filing with the stock exchanges.
Antfin’s total shareholding in Paytm has significantly reduced from 23.79 per cent in the last few weeks after it sold 10.3 per cent of its stake to Resilient Asset Management B.V., an overseas entity 100 per cent owned by Vijay Shekhar Sharma. This was followed by the sale of another 3.6 per cent in block deals.
With Resilient Asset Management B.V. now holding a 10.3 percent stake in OCL, Sharma’s shareholding in OCL, both direct and indirect, has risen to 19.42 per cent making him the sole SBO of the company.
However, Paytm remains a professionally managed company with no identified promoter. As per Indian laws, for anyone to be identified as a promoter, the shareholding has to be above 25 percent.
A SBO is an individual who holds indirectly, or along with any direct holdings, at least 10 percent per cent of the shares of the company.
It may be recalled that the Corporate Affairs Ministry (MCA) amended in 2019 the Rules pertaining to Significant Beneficial Ownership in Companies to replace the 2018 Rules on the same matter.
This SBO Rule was brought into force to curtail various illegal activities like tax evasion, money laundering, and benami transactions and mandate all Companies to furnish a declaration to the Registrar of Companies (ROC) concerning their Significant Beneficial Owner.
The move was intended to aid the Government authorities in tracking the actual holders of ownership of the corporate entity.
Some analysts contend that Sharma becoming the SBO will remove the Chinese overhang from Paytm’s stock.
An earlier report by BofA Securities said that buying of this stake by Sharma “indicates his confidence in the story with a ‘skin in the game’ approach”.
This reduces the risk of some other strategic investor coming who would have a major stake like Sharma’s, it added.
The global brokerage firm further said,“We believe a Chinese shareholder (Antfin) ceasing to be the largest shareholder, would also directionally be positive for the company fundamentals.”