The Enforcement Directorate (ED) has sent a notice to the Enforcement Directorate (ED), a mother company of Fintech firm Paytm, for the alleged violation of some FEMA rules by the company regarding the acquisition of two subsidiaries. According to PTI news, the ED has given this information in the exchange filing. In this case, Paytm clarified that the alleged violation belongs to the period when both companies were not its subsidiary companies. Giving information to BSE, the company said that it received a FEMA violation notice from the Enforcement Directorate for its subsidiaries Little Internet Private Limited and Nearbai India Private Limited on February 28.
Case of 2015 to 2019
According to the news, Paytm said that it is in relation to the alleged violation of some provisions of Foreign Exchange Management Act, 1999 i.e. 2015 to 2019 by the company in relation to the acquisition of two subsidiaries Little Internet Private Limited and Nearbai India Private Limited. Notices have been issued to Forest 97 Communications Limited, its two acquired subsidiaries, LIPL and NIPL, and some current and former directors and officials of two subsidiaries.
No effect on services
The filing states that alleged violations are related to some investment transactions related to OCL, LIPL and NIPL. Paytm said that the matter is being addressed by focusing on resolving according to the applicable laws. The case has no effect on the services offered by Paytm to its consumers and traders, and all services are completely on and safe as usual.
Company is taking necessary legal advice
The filing states that to resolve the case according to the applied laws and regulatory procedures, the company is taking necessary legal advice and evaluating appropriate measures. Paytm acquired both companies in 2017. Group On India’s business Ankur Wariku started its founder CEO in 2011. The main management team of Wariku and Group -On India bought the Groupon India Business in 2015 and made it a free unit.
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