Paytm Looks to Resolve FEMA Allegations
Fintech leader Paytm is aiming to address the alleged violations of the Foreign Exchange Management Act, 1999 (FEMA) concerning its investments in two acquired firms — Little Internet Pvt Limited (LIPL) and NearBuy India Pvt Ltd (NIPL). The company has been issued a show cause notice by the Directorate of Enforcement (ED) related to these investments.
As stated in the company’s filing to the stock exchange, certain supposed infractions are linked to Little and Nearbuy for activities that took place prior to these firms becoming subsidiaries of Paytm. These claimed transactions date back to the years between 2015 and 2019.
Paytm finalized the acquisition of Nearbuy and Little in 2017, subsequently merging them and obtaining a controlling interest in the newly formed entity.
Headquartered in Noida, the company has indicated it is pursuing legal counsel and intends to take suitable measures to resolve the issues through the relevant regulatory frameworks in compliance with the applicable laws.
Paytm has reassured its users that operations and app services are continuing normally and remain secure. The company reiterated its dedication to transparency, governance, and adherence to regulations.
