Daijiworld Media Network- New Delhi
New Delhi, Mar 4: The Enforcement Directorate (ED) has issued a show cause notice to Paytm’s parent firm, its managing director, and associated entities over alleged violations of the Foreign Exchange Management Act (FEMA) amounting to Rs 611 cr.
As per Paytm’s annual report for FY 2024, fintech major’s founder Vijay Shekhar Sharma serves as its chairman, managing director (MD), and chief executive officer (CEO).
In a statement issued on Monday, the ED said the notice was served by a special director following a probe, ahead of adjudication proceedings under FEMA.
A Paytm spokesperson stated that the company is addressing the matter in compliance with applicable laws and regulatory processes.
The notice has been issued to One 97 Communications Ltd (OCL), Paytm’s flagship firm, along with its MD and subsidiaries including Little Internet Pvt Ltd and Nearbuy India Pvt Ltd. The ED alleges that these entities violated FEMA provisions to the tune of Rs 611 cr.
According to the investigation, OCL made foreign investments in Singapore but failed to submit the required filings to the Reserve Bank of India (RBI) for the establishment of an overseas step-down subsidiary.
Further, the company “received foreign direct investment (FDI) from overseas investors without adhering to RBI’s pricing norms,” the agency said.
More details are awaited.