Paytm Addresses FEMA Allegations On Acquired Firms, Says 'Contraventions' Were Committed Before It Took Them Over
Certain alleged FEMA breaches are linked to transactions that took place before Paytm took over the entities, says the fintech major.
Noida: Fintech major Paytm has received a show cause notice from the Directorate of Enforcement (ED) regarding alleged contraventions under the Foreign Exchange Management Act, 1999 (FEMA) related to its investments in two acquired companies — Little Internet Pvt Ltd (LIPL) and NearBuy India Pvt Ltd (NIPL).
According to the company's stock exchange filing, the allegations include transactions between 2015 and 2019, including a period before Paytm acquired LIPL and NIPL. The company clarified that certain alleged contraventions are attributable to these companies prior to them becoming Paytm's subsidiaries.
The firm said it is currently seeking legal advice and will take necessary steps to resolve the matter through the appropriate regulatory processes and in accordance with the applicable laws.
The Noida-based digital payments and financial services company also noted that it will continue to focus on strengthening its business operations while fuelling the growth of digital transactions in the country.
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