ED issues notice to Paytm and its MD over alleged Rs 611 crore FEMA violations
03 Mar 2025, 07:39 PMAn ED investigation reveals that OCL had made foreign investment in Singapore and did not file necessary reporting to RBI for creation of overseas step down subsidiary.
Team Head&Tale
Share the story on
The Directorate of Enforcement (ED) has issued show cause notice to One97 Communication Ltd, parent company of Paytm, and its managing director and others for the contraventions of provisions of FEMA, 1999.
ED, in its release, said that investigation reveals that Paytm's flagship company OCL had made foreign investment in Singapore and did not file necessary reporting to RBI for creation of overseas step down subsidiary.
"Further, OCL had also received Foreign Direct Investment from overseas investors without following proper pricing guidelines stipulated by RBI," it added.
Last week, Paytm informed the stock exchange that it has received a show cause notice from the ED in connection with violations of foreign exchange norms. The Noida-based fintech major, in its filing, said that the alleged FEMA violations are linked to its acquisition of two subsidiaries -- namely Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL) erstwhile Groupon.
These transactions took place between 2015 and 2019.
"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 notice has also been issued to the "certain current and past directors and officers of the company and its two subsidiaries."
The show cause notice alleges contraventions in respect of aggregate transaction amounts of Rs 611 crore -- Rs 245 crore attributable to OCL; Rs 344.99 crore to Little Internet, and Rs 20.97 crore to Nearbuy.
Paytm further stated that while the notice doesn't specify a "financial impact, in the form of a demand or penalty", it is " seeking necessary legal advice and evaluating appropriate remedies to resolve the matter."
"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," the company added.
Paytm acquired Nearbuy and Little in 2017, merged them, and took a majority stake in the combined entity.
Who Reads Us
“I enjoy reading The Head and Tale for their coverage on the Fintech landscape. The reporting is incisive and honest, and it demonstrates a sharp understanding of the industry and the issues that concern it. I'd like to extend my best wishes to Arti for her continued success.”
“Well-researched, informative and analysis based reporting makes an interesting read. 'The Head and Tale' news portal has been demonstrating this quite well covering fintech and emerging tech sectors. Their timely updates, exclusive stories and different perspectives on these sectors help me stay informed. Kudos to Arti Singh for pursuing her passion and best wishes to the team.”
“The Head and Tale stands out for its deep industry knowledge and impressive network of sources. I especially appreciate that the reporting remains independent, rarely resorting to paid puff pieces, making it a publication I can genuinely trust. Having followed Arti’s work for years, I’ve come to rely on The Head and Tale for its unparalleled insight and truly independent coverage. Arti’s long-standing presence in the sector means her reporting is always informed, with access few can match.”
“What I really appreciate about The Head and Tale is that it doesn’t just report the news, it interprets it. The stories are well-researched, comprehensive, and bold. Arti brings a fearless lens to reporting, often asking the uncomfortable but necessary questions. She makes you pause, reflect, and rethink what it all means for the payments and fintech ecosystem. It’s rare to find journalism that’s this sharp, timely, and relevant to the work we do every day.”
“I’ve always valued journalism that goes beyond surface-level headlines. The Head and Tale does exactly that - it connects the dots, asks the tough questions, and brings clarity to the shifts shaping our evolving industry. I’ve even encouraged my team members to subscribe, because staying informed through credible, deeply reported stories is as important as building products. For me, The Head and Tale has become part of essential reading.”
