regulatory mechanism

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(40 marks) Read the case and answer the questions that follow.

A day after Bombay Stock Exchange (BSE) sought clarification from Paytm on the “significant movement” in its share price, the company said in a filing that it has no information which could have a bearing on the price that it hasn’t disclosed to the stock exchanges. Nonetheless, the stock hit a new all-time low of Rs 520 on March 22, 2022.

Paytm parent company One97 Communications has said in a filing with BSE that its business fundamentals remain robust and that it has shared all information that could have a bearing on its share price with stock exchanges.

The clarification comes a day after BSE sought a clarification from the company on its plummeting share price. BSE said it sought the clarification “to ensure that investors have latest relevant information about the company and to inform the market so that the interest of the investors is safeguarded”.
In its filing, Paytm said it has from time to time made all necessary disclosures to stock exchanges within the stipulated timeline. “The company would also like to point out that the business fundamentals remain robust as demonstrated in our last earnings release dated February 4, 2022. We would like to reiterate that the company is committed to comply with the listing regulations,” it said.

 

(Source: Paytm Puts on a Brave Face. (2022, March 23). Retrieved from 

https://economictimes.indiatimes.com/:

https://economictimes.indiatimes.com/tech/newsletters/tech-top-5/paytm-puts-on-a-brave-face

uae-crypto-fund-to-bet-big-on-india/articleshow/90400482.cms)

 

 

  1. Do you think Paytm was actually safeguarding the interests of their shareholders? Support your answer with TWO reasons.                                                                                                                    (10 marks)

 

  1. Suggest THREE measures that the board could have brought about in the disclosure policy of the company which could have prevented the problem mentioned in the given case.                     (15 marks)

 

  1. Suggest THREE changes that Paytm could have brought about in their regulatory mechanism which would have addressed the above mentioned problem in the given case.                                    (15 marks)