Shares of One97 Communications Limited, the parent company of Paytm, experienced a decline of over 3% in early trading on Tuesday following the Enforcement Directorate’s (ED) issuance of a notice alleging violations of the Foreign Exchange Management Act (FEMA).
The ED’s investigation uncovered that Paytm and its subsidiaries, Little Internet Private Limited and Nearbuy India Private Limited, allegedly contravened FEMA provisions between 2015 and 2019, involving transactions totaling approximately ₹611 crore. These violations pertain to unreported foreign investments and the receipt of foreign direct investments without adhering to the Reserve Bank of India’s (RBI) pricing guidelines.
In response, Paytm clarified that the alleged violations occurred before these companies became its subsidiaries. The company emphasized its commitment to resolving the matter in accordance with applicable laws and regulatory processes and assured stakeholders that its services to consumers and merchants remain unaffected.
This development comes as Paytm awaits a payment aggregation license from the RBI, having faced previous regulatory actions, including a restriction on accepting new deposits.
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