Paytm founder Vijay Shekhar Sharma is facing a new data challenge - some people have threatened to leak his personal data, compromising the reputation of his company One97 Communications.

Three of the mobile wallet's employees, including Chief Executive Officer (CEO) Sharma's secretary, were arrested on Monday by the Noida police for allegedly trying to extort Rs 200 million by threatening to leak his personal data. Sources said the alleged blackmailers threatened to ruin Sharma's public image.

Sharma's personal secretary (whose name was not revealed by the police), her husband and property dealer Rupak Jain, and Devendra Kumar, a manager in Paytm's administration department, have been arrested. A fourth person based out of Kolkata, whose name was also not revealed, is absconding, police said.

This is a critical time for Paytm, which is still getting money from the last round of funding of about $340 million from Warren Buffett-owned Berkshire Hathaway.

What happened?

• Alleged blackmailers threaten to ruin Sharma's public image
• Extortion calls made from Kolkata and Bangkok numbers
• Sharma transfers ~200,000 to extortionists on Oct 15
• Police, investigating matter for almost a week, is unsure if the threat was to Sharma's data or to his firm that houses data of 350 mn people

A leak of Sharma's personal data leading to a scandal would have cast its shadow on this deal, as well as embarrassed major investors such as Alibaba and SoftBank.

Police said they were unsure what the alleged blackmailers were threatening to leak - Sharma's personal data or something about his company, which has the data of 350 million users.

"The owner of Paytm lodged a complaint with the police that some employees, a woman and her aides, had stolen some data from the company and were blackmailing him. They were demanding Rs 200 million for not leaking it," said Ajay Pal Sharma, senior superintendent of police, Gautam Budh Nagar.

Paytm was in the news recently because of allegedly sharing user data with the government.

Extortion call from Kolkata

Sources in Noida police said Sharma contacted the security forces a week back and complained about extortion calls.

"He suspected his personal secretary of being the one behind the extortion bid. We are still analysing the data to understand how it would have been damaging to Sharma as well as his firm. We are also checking if the data was duplicated and there are copies," said a senior police officer.

Police said the person from Kolkata - most likely an accomplice of Kumar - called Sharma and asked for the money. The Paytm founder wired Rs 200,000 to the extortionist on October 15.

"After getting Rs 200,000, the extortionist called again and even revealed he was from Kolkata. We put the call under technical surveillance and found that Sharma's personal secretary as well as her husband and Kumar were all linked to this caller," added the officer.

Police said Sharma's personal secretary has access to his laptop and mobile phones, and might have stolen the data from there. The trio is in police custody.

Paytm to stand by employees

Sharma was not available for comments. Paytm, however, said it would support its employees.

"Noida police has arrested three people, including a female employee of Paytm, in an extortion case. We are standing by our colleagues till the police inquiry reaches its conclusion," the company said in a statement.

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First Published : October 23, 2018 04:30 AM