Market watchdog Securities and Exchange Board of India (SEBI) has issued an administrative warning to One97 Communications Ltd., the parent company of payments aggregator 'Paytm', regarding related party transactions it entered into with its subsidiary Paytm Payments Bank for the financial year 2021-2022.
One97 Communications uploaded the letter dated July 15, 2024, to the exchanges on Monday. In it, SEBI stated that the company's excessive related party transactions with Paytm Payments Bank during the fiscal year 2021–2022 were carried out without the consent of the shareholders or the audit committee.
SEBI Violation by Paytm
SEBI has identified two violations: related party transactions valued at Rs 36 crore and Rs 324 crore, respectively.
The previously mentioned infractions have drawn extensive attention. So, in order to prevent future occurrences of this kind of thing, you are advised to exercise caution and raise your compliance standards. If you don't, appropriate enforcement action will be taken in line with the law, according to the letter from SEBI.
In order to take the required corrective action, SEBI has also requested that Paytm present the letter to its board. Following this, the company must submit the action taken report to the regulator within ten days.
In the exchange filing, Paytm stated that they are dedicated to maintaining the highest compliance standards and that they have continuously acted in accordance with SEBI regulations. It will shortly provide SEBI with its response as well.
SEBI further action for Paytm
In order to take the required corrective action, SEBI has also requested that Paytm present the letter to its board. Following this, the company must submit the action taken report to the regulator within ten days.
Paytm's Reponse
In the exchange filing, Paytm stated that they are dedicated to maintaining the highest compliance standards and that they have continuously acted in accordance with SEBI regulations. It will shortly provide SEBI with its response as well.
Additionally, Paytm stated that there would be no effect on the business's operations, finances, or other aspects.
RBI Banned paytm
The Reserve Bank of India prohibited Paytm Payments Bank from conducting any banking operations, including deposits, credits, and wallet top-ups, on January 31 of this year.
