Paytm Receives FEMA Notice, Company Clarifies

Aakhir Tak – In Shorts

• Paytm received a notice from the Enforcement Directorate for alleged FEMA violations.
• The notice relates to the acquisition of Little Internet and Nearbuy between 2015-2019.
• Paytm states that the notice will not impact its services.
• The company is seeking legal advice and taking steps to resolve the matter.
• Paytm upholds principles of transparency, governance, and compliance.

Aakhir Tak – In Depth

Paytm, a digital payments and financial services company, has received a show-cause notice from the financial crime watchdog for an alleged violation of the Foreign Exchange Management Act (FEMA). This notice has prompted a clarification from the company. Paytm is committed to complying with FEMA regulations.

According to the notice, irregularities were found in the acquisition of two subsidiaries, Little Internet Private Limited and Nearbuy India Private Limited, between 2015 and 2019. The company allegedly failed to comply with regulations during the acquisition.

However, the Noida-based company has assured that the notice will have no impact on its services for users, customers, and merchants. Paytm is dedicated to providing excellent service to its customers.

In an exchange filing, Paytm said, “Pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we hereby inform that a show cause notice dated February 27, 2025 has been received by the Company on February 28, 2025 at 19.27 Hrs. from the Directorate of Enforcement, Government of India. This is in relation to alleged contraventions for the years 2015 to 2019 of certain provisions of the Foreign Exchange Management Act, 1999 (FEMA) by the Company, in relation to its acquisition of two subsidiaries namely Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL) erstwhile Groupon, along with certain Directors & Officers”. The company is working with its directors to resolve the issue.

The company filing also informed that the allegations against the company are regarding compliance with FEMA regulations in relation to its investments in Little Internet Private Limited and Nearbuy India Private Limited. The company is completely transparent about its investments.

“Certain alleged contraventions attributable to two acquired companies – Little Internet Private Limited and Nearbuy India Private Limited – pertain to a period when these were not subsidiaries of the company,” Paytm said. The company provided information about irregularities before the acquisition.

“To resolve the matter in accordance with applicable laws and regulatory processes, the company is seeking necessary legal advice and evaluating appropriate remedies,” it added. The company wants to resolve the issue as soon as possible.

The company also said that it upholds principles of transparency, governance, and compliance in all its business practices. “This matter is being addressed with a focus on resolving it in accordance with applicable laws. There is no impact of this matter on Paytm’s services to its consumers and merchants, and all services are fully operational and secure, as always,” Paytm said. The company has assured its users that its services are safe and secure.

Aakhir Tak – Key Takeaways to Remember

• Paytm received a notice for alleged FEMA violations.
• The notice relates to acquisitions between 2015-2019.
• The company says its services will not be affected.
• Paytm is seeking legal advice and working to resolve the matter.
• The company upholds transparency and compliance.

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