Paytm on Wednesday said that its founder and CEO Vijay Shekhar Sharma has voluntarily surrendered 2.1 crore employee stock options (ESOPs) that were previously granted to him. The move comes just months after the Securities and Exchange Board of India (SEBI) issued show-cause notices citing violations in the issuance of share-based employee benefits.

SEBI had flagged the ESOP grant last August, stating that the allocation of 2.1 crore stock options to Sharma was not in compliance with its regulations governing employee benefit schemes. As per the regulations, major shareholders who can significantly influence a company’s decisions are not permitted to hold ESOPs.

A year before Paytm’s 2021 IPO, Sharma held a 14.7% stake in the company, making him ineligible for ESOPs. To comply with the rules and qualify for stock option grants, Sharma reduced his stake to 9.1% by transferring 30.97 million shares to Axis Trustee Services, which was acting on behalf of the Sharma family trust.