‘FEMA violations’: ED issues show-cause notice to Paytm parent firm, 2 subsidiaries

The Enforcement Directorate (ED) has issued a show-cause notice to the parent company and two subsidiary companies of Paytm for allegedly violating provisions of the Foreign Exchange Management Act (FEMA).

A spokesperson for the central agency said the Special Director of ED (Adjudication) New Delhi, has issued the notice to Paytm’s flagship company M/s One 97 Communication limited (OCL), its managing director, and other Paytm subsidiary companies M/s Little Internet Pvt Ltd and M/s Nearbuy India Pvt Ltd over contravention of provisions of FEMA, 1999, to the tune of around Rs 611 crore.

“Probe conducted by ED has revealed that Paytm’s flagship company OCL had made foreign investment in Singapore and did not file necessary reporting to the RBI for creation of overseas step down subsidiary. Also, OCL had also received Foreign Direct Investment (FDI) from overseas investors without following proper pricing guidelines stipulated by RBI,” the spokesperson said.