New Delhi: The Enforcement Directorate (ED) has issued a notice to One97 Communications Ltd (OCL), the parent company of Paytm, over alleged violations of the Foreign Exchange Management Act (FEMA) by the company and its two subsidiaries—Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL). The notice pertains to certain investment transactions between 2015 and 2019.
According to an exchange filing, Paytm confirmed receiving the notice on February 28, 2025, regarding transactions amounting to over ₹611 crore. The company has stated that the alleged breaches occurred before LIPL and NIPL became its subsidiaries.
Breakdown of Alleged Violations
The ED’s notice cites:
- ₹245 crore in transactions related to One97 Communications Ltd (OCL)
- ₹345 crore related to LIPL
- ₹21 crore linked to NIPL
Paytm clarified that the alleged contraventions linked to LIPL and NIPL occurred before 2017, when these entities were not yet under OCL’s ownership.
Paytm’s Response and Legal Stand
The fintech giant has assured stakeholders that it is addressing the issue in compliance with regulatory laws and seeking legal advice to resolve the matter. Paytm also emphasized that its services to customers and merchants remain fully operational and unaffected.
“The company is evaluating appropriate remedies and will comply with all necessary regulatory processes to resolve this matter,” Paytm stated in its filing.
Background of Acquisitions
Paytm acquired Little Internet Private Limited and Nearbuy India Private Limited in 2017. Nearbuy, originally Groupon India, was founded in 2011 by Ankur Warikoo and later became an independent entity in 2015 after being bought by its management team.
This latest development adds to regulatory scrutiny in the fintech sector, where compliance with foreign exchange regulations has become a key area of focus for authorities.
The ED’s notice does not specify any immediate financial penalties, but further regulatory actions may follow based on Paytm’s response and legal proceedings.