Paytm IPO hit by nuisance suit, who is this mystery 'co-founder'?

It has been almost a month since fintech giant Paytm filed it's DRHP for it's initial public offer (IPO) and yet there was no movement towards the much awaited IPO. Reports then surface that there is a mysterious 'co-founder' that has emerged and is threatening a suit against the fintech giant just ahead of the IPO.

Reuters reported that a 71-year-old former director named Ashok Kumar Saxena has reached out to SEBI to stall the IPO plans, as he is alleging he is a co-founder who invested $27,500 two decades ago but never got shares. These are allegations Paytm and the parent company refute aggressively stating Saxena was repayed the Rs 13 lakhs he had put in.

As per filings Paytm's incorporation documents in the government database show Saxena as a director of the company between 2000 and 2004. However due to non appearance for board meetings Saxena was removed from the board and the company in 2004 as per sources.

The matter has reached a New Delhi court, where Saxena in July urged a judge to press the city police to register a case on his complaint. The court order shows police have been asked to respond and the case will be heard on Aug. 23.

The validity of the claims however raises many questions. Why did this 'co-founder' wait till the IPO filing to seek a place at the table? Why were these discrepancies if actually true not raise red flags during repeated due diligences done by Alibaba, Berkshire Hathway before investing? If it is not a nuisance suit then why did the accuser not approach the civil court for a resolution?

Paytm filed for a Rs 16,600 cr IPO with SEBI on July 15. According to the draft document, the company plans to raise Rs 8,300 crore through fresh equity issuance and another Rs 8,300 crore through an offer-for-sale.