As is typical of many new age startups, one more notice for violations.
The Enforcement Directorate (ED) has issued a show-cause notice to the parent company and two subsidiary companies of Paytm for allegedly violating provisions of the Foreign Exchange Management Act (FEMA).
- Notice is to the parent One 97 Communication limited (OCL), it’s managing director, and two subsidiary companies Little Internet Pvt Ltd and Nearbuy India Pvt Ltd over contravention of the provisions of FEMA, 1999, to the tune of around Rs 611 crore.
“Probe conducted by ED has revealed that Paytm’s flagship company OCL had made foreign investment in Singapore and did not file necessary reporting to the RBI for creation of overseas step down subsidiary. Also, OCL had also received Foreign Direct Investment (FDI) from overseas investors without following proper pricing guidelines stipulated by RBI,” the spokesperson for ED’s office informed.
According to the ED, OCL’s subsidiary company in India, Little Internet Pvt Ltd, had also received FDI from overseas investors without following the pricing guidelines stipulated by RBI.
Alleged contraventions relate to the period 2015 to 2019.
As per the Company, it’s looking into the issue to resolve the matter in accordance with law.