Shares of One97 Communications, the parent company of Paytm, will be in focus on March 3 after the Enforcement Directorate (ED) issued a show cause notice for alleged violations of the Foreign Exchange Management Act (FEMA).
ED’s Notice on FEMA Violations
On February 28, the ED served a notice to One97 Communications and its subsidiaries, Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL). The notice pertains to alleged violations linked to the acquisition of these subsidiaries between 2015 and 2019.
The ED’s notice has been sent to:
- One97 Communications
- LIPL & NIPL (Acquired Subsidiaries)
- Certain past and current Directors and officers of the company and its subsidiaries
Paytm’s Response
In a regulatory filing, Paytm clarified that the alleged violations are related to a period before these companies became its subsidiaries. The company stated that it is seeking legal advice to address the issue and evaluate possible solutions.
As per the details shared:
- One97 Communications (OCL) transactions under scrutiny amount to ₹245 crore
- LIPL transactions in question total around ₹345 crore
- NIPL transactions listed in the alleged breach stand at ₹21 crore
Paytm emphasized that it follows strict governance and compliance measures in all its business operations. The company assured its users that the issue will not affect Paytm’s services, and all transactions remain fully operational and secure.
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