One 97 Communications, the parent company of Paytm, has received an administrative warning letter from market regulator SEBI, the company informed stock exchanges late evening on July 15.
The warning letter is over related party transactions entered by the company with Paytm Payments Bank for FY22, which the regulator said did not have the approval of either the audit committee or the shareholders.
Regulator Sebi has observed several non-compliances in due course of examination, the filing said. The warning letter from Sebi highlights that OCL transacted with Paytm Payments Bank over and above the limits of approved resolution to the tune of Rs 360 crore as services availed as well as rendered.
The Company believes it has consistently acted in compliance with Regulation 23 read with Regulation 4(1)(h) of the SEBI Listing Regulations, including any amendments and updates to these regulations over time.
Sebi has viewed the violations very seriously and in the warning letter, the regulator said, "You are, therefore, warned to be careful in future and improve your compliance standards to avoid recurrence of such instances in future, failing which appropriate enforcement action would be initiated by the law."
Earlier this year, the Reserve Bank of India slapped major business restrictions on Paytm Payments Bank Limited, and effectively ended a bunch of its core operations, due to non-compliance.
Shares of Paytm, though off lows of the year, are still languishing almost 27 percent down on YTD basis. On July 8, CEO Vijay Shekhar Sharma had announced his goal to make Paytm a "$100 billion company", sending the stock higher.
Shares of Paytm were finding buying interest earlier in May as well, when reports emerged that the Adani Group was in talks for a stake buy, which was later denied by both entities.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
