Paytm’s $2.2-billion IPO is facing an unusual hurdle. A 71-year-old former director has urged markets regulator SEBI to stall the IPO, alleging that he is a co-founder who invested $27,500 two decades ago but never got shares. 

In legal documents seen by the Reuters, Paytm says that the claim by Ashok Kumar Saxena and allegations of fraud in a police complaint in New Delhi are mischievous attempts to harass the company. The dispute though is cited under “criminal proceedings” in Paytm’s July IPO prospectus filed for regulatory approval. 

Mr Saxena has denied harassment and said that Paytm has a high-profile position that means that a private individual like him is not in a position to harass the company. 

Mr Saxena has approached the SEBI to stall the IPO, arguing that investors could lose money if his claim is proved right, according to a previously-unreported complaint seen by the Reuters. The SEBI did not respond to a request for comment. 

Shriram Subramanian of shareholder advisory firm InGovern has said that the tussle may spark regulatory inquiries and complicate or delay the approval of Paytm’s IPO that could value it at up to $25 billion. 

“SEBI will need assurance that it will not impact the company and the public shareholders once listed,” Mr Subramanian said. 

Irrespective of what the regulator decides, the dispute could become a legal headache ahead of the much-awaited IPO of Paytm, which counts China’s Alibaba and Japan’s SoftBank among its investors.