Paytm has been issued a show cause notice by the Enforcement Directorate (ED) for alleged violations of the Foreign Exchange Management Act (FEMA), the company revealed on Saturday.
The notice pertains to irregularities in the acquisition of two subsidiaries—Little Internet Private Limited and Nearbuy India Private Limited—between 2015 and 2019, according to Paytm’s statement.
Reassuring its users, the company clarified that the notice will have no impact on its services for consumers and merchants. “To resolve the matter in accordance with applicable laws and regulatory processes, the Company is seeking necessary legal advice and evaluating appropriate remedies,” Paytm’s statement further read.
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Paytm also clarified that part of the alleged violations occurred before its investment in Little and Nearbuy, emphasizing that these transactions took place prior to the companies becoming its subsidiaries.
In its regulatory filing, Paytm reassured that the issue has no impact on its operations. All services on the Paytm app remain fully functional and secure, with no disruption for users or merchants.
“Paytm adheres to the highest standards of transparency, governance, and compliance in all its business operations. We are addressing this matter in line with applicable laws and remain committed to resolving it. There is no impact on Paytm’s services for consumers and merchants, and all operations continue as usual,” the company stated.
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