The Enforcement Directorate (ED) has issued a notice to Paytm owner One97 Communications Ltd (OCL) for alleged violations of the Foreign Exchange Management Act (FEMA) linked to transactions worth over ₹611 crore. The case pertains to the acquisition of two subsidiaries, Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL). Â
One97 Communications (OCL), which owns Paytm brand, informed BSE that it has received FEMA violation notice from the ED on February 28 for its subsidiaries, Little Internet Private Limited and Nearbuy India Private Limited.Â
OCL stated that it received the FEMA violation notice on February 28, targeting itself, its subsidiaries, and certain current and former directors and officers. “This is in relation to alleged contraventions for the years 2015 to 2019,” the filing said. Â
About Rs 344.99 crore of the total Rs 611.17 crore is linked to investment transactions involving LIPL, an amount of Rs 245.20 crore pertains to OCL and the remaining Rs 20.97 crore relates to NIPL, according to an exchange filing. Â
One97 Communications clarified that the alleged breach pertains to the period when the two companies were not its subsidiaries.Â
The company, which acquired LIPL and NIPL in 2017, emphasized that it is addressing the matter in line with legal and regulatory requirements. “To resolve the matter in accordance with applicable laws and regulatory processes, the company is seeking necessary legal advice and evaluating appropriate remedies,” the filing said.
“There is no impact on Paytm’s services to consumers and merchants, and all services remain fully operational,” it added. Â
The development comes amid regulatory scrutiny of Paytm Payments Bank, which last year denied any foreign exchange rule violations. On January 31, the Reserve Bank of India (RBI) directed Paytm Payments Bank to halt most of its operations from March 1, 2024, citing “persistent non-compliances and material supervisory concerns.”