Munish Varma, managing partner at SoftBank Investment Advisors steps down from the boards of Paytm and Policybazaar. The step comes after both companies listed on the Indian bourses last November.
Reports suggest that this was in line with SoftBank’s policy of stepping down from the boards of portfolio companies once they go public. The firms are expected to make a formal announcement to the stock exchanges.
Varma’s exit from Paytm comes as the company faces a regulatory crackdown, with the Reserve Bank of India (RBI) having banned it from adding new customers to its payments bank and wallet last week.
Shares of Paytm’s parent firm One97 Communications were down more than 10% on the afternoon of March 15, after shedding more than 12% of their value the previous day. The stock is now trading at just over Rs 600, or more than 70% down from its issue price of Rs 2,150.
Since it debuted on the bourses, Paytm has been struggling to convince investors and analysts of its ability to earn profits and continue growing, which has caused brokerage firms to issue severe price corrections for its shares.
However, Sharma was also involved in a motor vehicle incident in Delhi in February, for which he was arrested and let out on bail. The company claimed the issue was “minor”, and that media reports about his arrest were “exaggerated”.
“Expectations are clearly chalked out and a timeline has been given to us (by the RBI),” Sharma told ET on March 14. “We believe we will be able to complete the IT audit within the timeline and submit it.” However, he didn’t specify what this timeline was.
Sharma owns 51% of Paytm Payments Bank while One97 Communications owns the remaining 49%.