New Delhi: One97 Communications the owner of a Fintech giant Paytm has received a show cause notice from the Enforcement Directorate (ED) on Saturday, for alleged violation of certain (Foreign Exchange Management Act) FEMA rules in relation to the acquisition of two firm namely Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL).
Paytm received FEMA violation notice from the ED on February 28 for its subsidiaries, Little Internet Private Limited and Nearbuy India Private Limited, One97 Communications informed BSE.
ED notice has been issued to One97 Communications Limited, two of its acquired subsidiaries, LIPL and NIPL, and certain current and past Directors and officers of the company and its two subsidiaries, the filing said.
The exchange filing said, “This is in relation to alleged contraventions for the years 2015 to 2019 of certain provisions of the Foreign Exchange Management Act, 1999 (“FEMA”) by the Company, in relation to its acquisition of two subsidiaries namely Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL) erstwhile Groupon, along with certain Directors & Officers,”
“The alleged contraventions relate to certain investment transactions relating to OCL, LIPL and NIPL,” filing explained.
The filing added that, “Certain alleged contraventions attributable to two acquired companies – Little Internet Private Limited and NearBuy India Private Limited – pertain to a period when these were not subsidiaries of the Company,”
Paytm said that the issue is being addressed in compliance with applicable laws, and assured there is no impact on its services, which remain fully operational and secure.
“The notice has no impact on services to consumers and merchants,” Paytm said.
The filing said, “The Company is seeking legal advice and assessing appropriate remedies to resolve the issue in line with applicable laws and regulatory processes.”
Fintech giant acquired the two mentioned companies namely LIPL and NIPL in 2017.
