SEBI sent a warning letter to Paytm’s parent company, the matter is related to the transactions of the financial year 2021-22

Paytm has received an administrative warning letter from the Securities and Exchange Board of India (SEBI).administrative warning letter) has been received. Market regulator SEBI has sent a warning letter to Paytm’s parent company One 97 Communications in a series of transactions made during the financial year 2021-22. The matter is related to the related transaction with Paytm Payments Banks (PPBL) without the approval of the audit committee or shareholders in FY22. The company said in a notice to BSE that it has consistently worked in compliance with SEBI rules.

The fintech company said that it is committed to maintaining compliance standards and transparency and will also give its response to SEBI. In a letter dated July 15, SEBI said that it has investigated One97 Communications and its associate Paytm Payments Bank Limited (PPBL) in relation to the disclosure of financial and other information. According to SEBI’s letter, the following non-compliances were observed during the investigation in this matter.

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In the financial year 2021-22, the company and/or its subsidiaries carried out additional related party transactions (RPTs) with Paytm Payments Bank without the appropriate approval of either the audit committee or the shareholders. Paytm shared the contents of SEBI’s letter in a communication to BSE. According to the market regulator’s letter, the company claimed that it has prepared the cumulative numerical value (CNV) of the transactions carried out by the company and its subsidiaries with Paytm Payments Bank for shareholder reference.cumulative numerical value) was provided. Transactions between subsidiaries of One97 Communications and Paytm Payments Bank are not eligible as Related Party Transactions (RPT) during FY 2021-22.

SEBI said that on the other hand, the company’s board of directors and audit committee considered the transaction between One97 Communications and/or its subsidiaries with Paytm Payments Bank as a significant related party transaction (RPT). Also, a resolution was passed that the RPT with Paytm Payments Bank will be within the limits mentioned in the relevant proposals.

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SEBI’s letter listed additional RPTs (between One97 Communications and its subsidiaries, along with Paytm Payments Bank) without approval, which amounted to Rs 324 crore (One97 Communications acquiring services from Paytm Payments Bank) and Rs 36 crore (One97 Communications providing services to Paytm Payments Bank). SEBI said that the violations are extremely serious. He said that therefore you are warned to be careful in future and improve your compliance standards so that nothing like this happens again in future. Failure to do so will result in appropriate enforcement action as per law. enforcement action) will be initiated. The market regulator also advised the company to place its letter in the board meeting for its information and necessary corrective action, after which the action report should be submitted to SEBI within 10 days.