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Fintech firm One97 Communications Founder and CEO Vijay Shekhar Sharma effectively controls 24.3% voting rights in the company, investors’ advisory firm IiAS said in a report.

Institutional Investor Advisory Services in the report said that Sharma should formally signal that he remains in control and give investors the comfort that he is the promoter and not someone who is “sitting in the shadows”.

The recent no-cash transaction between Alibaba group firm Antfin (Netherlands) Holding (Antfin) and Sharma raised his stake in the company to 19.42 %.

Antfin, however, continues to hold the economic rights of the stake that is being transferred to Sharma.

IiAS said that a further 4.88% equity is held by the Sharma Family Trust in the name of Axis Trustee Services.

“We continue to believe that Vijay Shekar Sharma will have influence over how the 4.88% equity held by the trust will vote on shareholder resolutions, giving him effective control of 24.3% of the voting rights,” the report said.

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Sharma is at present Chairperson, Managing Director, and CEO of Paytm.

The advisory firm said that despite the significant erosion in shareholder wealth from the listing price or that the company burns cash and is yet to show profitable growth, or that many believe he is overpaid, investors have not soured on him.

“Vijay Shekhar Sharma is the present Chairperson, Managing Director and CEO, as a director, he is not liable to retire by rotation, and he has the right to a board seat for as long as he holds an executive capacity. He has remained central to the various shareholders’ agreements since the time the company embarked on its current journey,” the report said.

In January, IiAS had questioned Sharma’s eligibility to get stock option even though he enjoys rights similar to that of a promoter.

“Vijay Shekhar Sharma is the founder of Paytm, but not its promoter. He is a non-retiring director, chairs Paytm’s board and has a right to a board seat if he holds at least 2.5 % of the company’s equity. As a non-promoter, he receives stock options. Put differently, Vijay Shekhar Sharma enjoys the rights akin to that of a promoter and not its responsibilities and restrictions,” IiAS had said.

The advisory firm further said that One 97 Communications Limited is one of the several listed startups that have not classified their founders as promoters and the trend is typically seen in companies that have private equity investors in their pre-IPO cap-table.

“These founders enjoy several of the perks that promoters have, including board permanency, board control, and management leadership. There is one major difference. They can be granted stock options that promoters cannot get under Indian regulations, and their equity holdings do not carry the restrictions as those classified as promoters,” the firm had said.

When contacted a Paytm spokesperson said: “Paytm remains a professionally managed company with no identifiable promoter. Vijay Shekhar Sharma currently holds 9.12 %, and after the announced transaction is completed, he will own 19.42 %.

“We would also like to reiterate that there’s no cash transfer now, but will be paid at the time of OCD redemption. As a professionally managed company, we follow high standards of governance steps at our board and the committees.”