New Delhi, March 4 : Shares of Paytm’s parent company, One97 Communications Limited, fell over 3 per cent in early trading on Tuesday after the Enforcement Directorate (ED) issued a notice against the firm.
The stock dropped as much as 3.26 per cent to Rs 702 per share during intra-day trade.
The ED announced on Monday that it had sent a notice to One97 Communications, its managing director Vijay Shekhar Sharma, and other associated entities for alleged violations under the Foreign Exchange Management Act (FEMA).
The agency stated that its investigation had been completed, and the notice was issued as a step before the adjudication process begins.
According to the ED, Paytm’s subsidiaries, including Little Internet Private and Nearbuy India Private, have also received show-cause notices.
The alleged violations involve foreign investments made by One97 Communications in Singapore, for which the company did not file the necessary reports with the Reserve Bank of India (RBI).
Additionally, the company is accused of receiving Foreign Direct Investments from overseas investors without following the RBI’s pricing rules.
In response, a Paytm spokesperson stated that the company is committed to following regulatory guidelines and is working to resolve the matter in accordance with the law.
The company stated in a stock exchange filing that the alleged violations are linked to these subsidiaries for transactions that occurred before they were acquired by Paytm.
Paytm announced that it is seeking legal counsel and exploring suitable remedies through the available regulatory channels.
The company emphasised that part of the alleged violations relates to a time before its investment in Little and Nearbuy, stressing that these transactions took place before the companies became its subsidiaries.
Additionally, Paytm assured that the issue does not impact its operations. All services on the Paytm app continue to function normally and securely, with no disruption for users or merchants. (IANS)