The Enforcement Directorate (ED) has issued a show-cause notice (SCN) to One97 Communications Ltd (OCL)the parent company of Paytm, and its subsidiaries for alleged violations of the Foreign Exchange Management Act (FEMA), 1999, amounting to ₹611 crore.
The notice has been served by the Special Director of Enforcement (Adjudication), New Delhi, initiating adjudication proceedings.
According to the ED, OCL made foreign investments in Singapore but failed to report the creation of an overseas step-down subsidiary to the Reserve Bank of India (RBI). The company also received foreign direct investment (FDI) from overseas investors without adhering to RBI’s pricing guidelines.
Two subsidiaries of OCL — Little Internet Pvt Ltd and Nearbuy India Pvt Ltd — were also found to have violated FEMA norms. Little Internet received FDI without following RBI’s pricing guidelines, while Nearbuy India failed to report FDI transactions within the stipulated timeframe.
In response, Paytm stated in a regulatory filing that the allegations pertain to transactions between 2015 and 2019, including those of Little Internet and Nearbuy India before they became its subsidiaries.
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The company said it is evaluating legal remedies and remains committed to resolving the matter in line with regulatory requirements. Despite the notice, Paytm assured that its services to consumers and merchants remain unaffected and fully operational.
Shares of One 97 Communication closed over 2% higher on BSE today, March 3.
First Published: Mar 3, 2025 5:12 pm IS
