Questions were recently raised by securities lawyers and proxy advisory firms on founders of money-losing startups continuing to retain control of the companies even though they classified themselves as public shareholders. The issue of founders enjoying the perks of being a promoter without being classified as one was thrust into the limelight after Paytm founder-chief executive Vijay Shekhar Sharma decided to acquire an additional 10.3% in the company from Ant Group.
Sharma is a non-retiring director on the board of Paytm parent One97 Communications Ltd, chairman of the company, and has a right to a board seat as long as he holds at least 2.5% of the company, things which securities lawyers believe give him control of the company. But Sharma does not call himself a promoter of Paytm.
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