Bengaluru Court Restrains Swiggy From Altering Ex-Employee’s Stock Options
The Bengaluru court's direction to Swiggy comes after the former executive, who was terminated earlier this year, challenged the company's handling of his vested ESOPs.
A Bengaluru court, in a directive issued on Thursday, has temporarily stopped food delivery platform Swiggy Ltd. from creating any third-party rights or charges on approximately 200 employee stock options held by a former assistant vice president of the company.
Employee stock options, or ESOPs, are benefits rolled out mostly by startups that grants employees the right to purchase a certain amount of company's shares at a predetermined price, often at a discount, after a specified period known as the "vesting period." The idea is to align employees’ interests with those of the company by giving them a stake in its success.
The Bengaluru court's direction to Swiggy comes after the former executive, who was terminated earlier this year, challenged the company's handling of his vested ESOPs.
The court order specifies that Swiggy and its directors are presently barred from creating any charge, interest, or alienation over 185.454 vested and unexercised stock options and 24 exercised stock options held by the plaintiff. The court's interim relief will remain in effect until the next hearing, scheduled for Nov. 23, 2024.
The plaintiff is required to fulfill provisions under Order 39 Rule 3-A of the Civil Procedure Code before Swiggy is formally served with suit summons, notices for interim applications, and this order.
The development comes amid the initial public offering launched by Swiggy to raise up to Rs 11,327 crore. The subscription to the issue stood at 3.59 times as of 7:00 p.m. on Friday.
