Paytm shares sink 2% on show cause notice from ED on FEMA violations

Payment aggregator One97 Communications, which owns the Paytm brand, experienced a drop of more than two percent in its share value during the early trading session on March 3, following a FEMA violation notice received by the company.

On February 28, the Enforcement Directorate issued a FEMA violation notice to the company regarding its subsidiaries, Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL).

At 10 am, Paytm stock was priced at Rs 700.3 on the NSE, reflecting a 2 percent decrease from the prior day’s close. The announcement concerns infractions associated with the purchase of two subsidiaries – Little Internet Private Limited and Nearbuy India Private Limited for the years 2015 to 2019, the firm stated in a regulatory filing.

A notice has been sent to One97 Communications, along with its two acquired subsidiaries, LIPL and NIPL, as well as some current and former Directors and officers of the company and its subsidiaries. As per the breakdown provided by the company, OCL transactions exceeding Rs 245 crore, LIPL’s approximately Rs 345 crore, and NIPL around Rs 21 crore have been noted in the claimed violation.

The organization additionally stated that it maintains principles of transparency, governance, and compliance throughout all its business operations.

“This matter is being addressed with a focus on resolving it in accordance with applicable laws.” “There is no impact of this matter on Paytm’s services to its consumers and merchants, and all services are fully operational and secure, as always,” Paytm said.