Enforcement Directorate Issues Notice to Paytm's Parent Company

The Enforcement Directorate (ED) has recently issued a show-cause notice to One97 Communications, the parent company of Paytm, over alleged violations of the Foreign Exchange Management Act (Fema) amounting to Rs 611 crore. This notice, dated February 27, highlights alleged contraventions between 2015 and 2019 related to Paytm's acquisition of two subsidiaries, Little Internet and Nearbuy India.

Paytm's Response to the Allegations

In a regulatory filing on Saturday, Paytm disclosed the development and stated that it is currently seeking legal advice and evaluating its options to address the allegations. The company acquired Little Internet and Nearbuy India in December 2017 as part of its strategy to expand its presence in offline commerce.

Details of the Alleged Violations

According to the ED's notice, the alleged violations pertain to investment transactions involving One97 Communications and its subsidiaries. Paytm has clarified that some of these transactions predate its ownership of the two companies, indicating that a portion of the alleged contraventions occurred before they became subsidiaries of One97 Communications.