Paytm drops after ED slaps notice for violating FEMA Act 1999

One 97 Communications (Paytm) fell 1.44% to Rs 706 after the company said that it has received show cause notice (SCN) from the Enforcement Directorate (ED), Government of India for violating provisions of Foreign Exchange Management Act, 1999 (FEMA)

The Enforcement Directorate (ED) alleged that the company contravened certain provisions of FEMA between 2015 to 2019 in relation to its acquisition of two subsidiaries, Little Internet Private (LIPL) and Nearbuy India Private (NIPL) erstwhile Groupon, along with certain Directors & Officers.

The alleged contraventions attributed to two acquired companies, Little Internet Private and NearBuy India Private pertain to a period when these were not subsidiaries of the company. The regulatory authority claims that the contravention involves aggregate transaction amounts of Rs 611.17 crore, including Rs 245.20 crore for OCL, Rs 344.99 crore for LIPL, and Rs 20.97 crore for NIPL.

 

To resolve the matter in accordance with applicable laws and regulatory processes, the company is seeking necessary legal advice and evaluating appropriate remedies.

Meanwhile, the company has partnered with RBL Bank to strengthen digital payment adoption among the banks merchant partners. As part of this collaboration, it will provide its Soundbox and card machines to RBL Banks merchant partners, providing them with easy-to-use and efficient payment solutions.

Paytm is India's leading mobile payments and financial services distribution company.

The companys net loss reduced to Rs 208.3 crore in Q3 FY25 from net loss of Rs 219.8 crore posted in Q3 FY24. Revenue from operations increased 10.14% quarter on quarter (QoQ) but fell by 35.88% year over year (YoY) to Rs 1,827.8 crore in the quarter ended 31 December 2024.

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