Paytm Faces Scrutiny Over Alleged FEMA Rule Violations

Shares of Paytm's parent company, One97 Communications, dropped over 4% amid a notice from the Enforcement Directorate regarding alleged FEMA rule violations concerning investment transactions involving two subsidiaries. While Paytm has clarified that the issues date back before these companies were its subsidiaries, the firm is seeking legal advice.

The stock of Paytm's owner, One97 Communications, slumped more than 4% following a notice from the Enforcement Directorate over alleged FEMA rule breaches. The firm's shares fell to Rs 683.55 on NSE and Rs 685 on BSE, with overall market indices showing a declining trend.

The notice relates to investment transactions involving subsidiaries Little Internet and Nearbuy, dating to when they were not under Paytm's control. Reportedly, the alleged breaches involve a total of over Rs 611 crore. The company clarified there was no immediate impact on their services.

The Delhi-based fintech giant is currently consulting legal experts to address the situation. Paytm had acquired the implicated subsidiaries in 2017, though the alleged contraventions pertain to the period before this acquisition. Services to consumers and merchants remain unaffected.