Enforcement Directorate (ED) On Monday, he said that he has issued a show cause notice of Rs 611 crore to Paytm’s original company, its managing director and units for the ‘violation’ of FEMA rules in various cases. According to Paytm’s annual report of 2023-24, Vijay Shekhar Sharma, founder of the major company of the Financial Technology (Fintech) sector, is its chairman, managing director (MD) and Chief Executive Officer. This notice has been issued by a special director of the investigating agency before the start of judicial proceedings. A Paytm spokesman said that the company is working to resolve the matter according to law and regulatory procedures.
Foreign investment in Singapore
The Enforcement Directorate said in a statement that Paytm’s leading company One 97 Communication Ltd. for violation of the provisions of the Foreign Exchange Management Act (FEMA). (OCL), its managing director and Little Internet Private Ltd. And Nearbai India Private Ltd. As if a show cause notice of about Rs 611 crore has been issued to other subsidiary companies of Paytm. Investigation found that One 97 Communication Ltd. Foreign investment in Singapore and did not give necessary information to the Reserve Bank of India (RBI) about the formation of global subsidiaries of subsidiaries.
RBI guidelines did not follow
It alleged that Forest 97 Communication also received Foreign Investment (FDI) from foreign investors without ‘complying with the appropriate pricing guidelines prescribed by the RBI. The ED said that FDI of Forest 97 Communication was a subsidiary Little India Private Ltd. from abroad. But for this the price assessment guidelines of RBI were not followed. Other subsidiary company Nearbai India Private Ltd. Did not give information about FDI received by the company within the RBI deadline. Paytm said in a information to the stock market last Saturday (March 1) that it received notice from the ED for the alleged violation of the FEMA rules in relation to the company and its two subsidiaries Little Internet and some investment transactions of Nearbai.
Paytm gave this answer
Later, Paytm clarified that the alleged violation belongs to the period when both companies were not its subsidiary companies. It acquired both companies in 2017. According to the company, alleged violations have been listed of transactions worth more than Rs 245 crore of One 97 Communication, about Rs 345 crore in Little Internet (LIPL) and about Rs 21 crore in Nearboy India (NIPL). It said, “Alleged violations are associated with some investment transactions related to One 97 Communication, LIPL and NIPL.” Paytm spokesperson said in a statement, “We are working towards resolving the matter as per the applicable laws and regulatory procedures. We are committed to strengthening and maintaining procedures in compliance with the highest standards of compliance and operation.
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