One97 Communications Limited (OCL), the parent company of Paytm, has received a show-cause notice from the Enforcement Directorate (ED) under the Foreign Exchange Management Act (FEMA), 1999. The notice, dated February 27, 2025, and received on February 28, 2025, pertains to alleged violations involving transactions worth approximately ₹611 crore. The allegations cover the years 2015 to 2019 and are related to the acquisition of two subsidiaries, Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL), previously known as Groupon India.
Key Allegations:
- The ED’s investigation claims that Paytm (OCL) made foreign investments in Singapore without filing the necessary reports to the Reserve Bank of India (RBI) for the creation of an overseas step-down subsidiary.
- Alleged contraventions include financial transactions amounting to:
- ₹245 crore by One97 Communications Limited (OCL)
- ₹345 crore by Little Internet Private Limited (LIPL)
- ₹21 crore by Nearbuy India Private Limited (NIPL)
- A portion of these alleged violations is attributed to transactions that occurred before LIPL and NIPL became subsidiaries of OCL in 2017.
Company’s Response:
- Paytm has clarified that some of the alleged violations occurred before the acquisition of LIPL and NIPL.
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