Securities premium cannot be used:

The correct option is to pay dividend to the shareholder of company.

Understanding Securities Premium
Securities premium represents the amount received by a company in excess of the face (nominal) value of its shares. This amount is credited to a special account called the "Securities Premium Account".

Legal Restrictions under the Companies Act
According to Section 52(2) of the Companies Act, 2013, the securities premium account is a restricted reserve. It can only be used for specific, legally defined purposes, which include:
1. Issuing fully paid bonus shares to the members (shareholders) of the company.
2. Writing off the preliminary expenses of the company.
3. Writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company.
4. Providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company.
5. For the purchase of its own shares or other securities (buy-back under Section 68).

Why Dividend Payment is Forbidden
Securities premium is treated as capital receipts rather than free revenue profits. Paying dividends to shareholders from this account is strictly prohibited by law because dividends must only be paid out of accumulated, divisible revenue profits. Utilizing capital reserves like the securities premium for dividend distribution would erode the company's capital base and mislead investors about its operational profitability. Therefore, securities premium cannot be used to pay dividends to the shareholders of the company.