One 97 Communications (OCL), which owns brand Paytm, has received an administrative warning letter from capital market regulator SEBI.\u00a0<\/p>\n
The warning is over lack of approvals from both the audit committee and shareholders for the related-party transactions between Paytm and Paytm Payments Bank (PPBL) during FY21-22.<\/p>\n
SEBI\u2019s letter said the violations were viewed seriously and warned the company of enforcement action if it failed to improve its compliance standards.<\/p>\n
In response, Paytm said in an exchange filing on Monday night that it has consistently adhered to all listing regulations and would address SEBI\u2019s concerns with a detailed response. \u201cThe 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,\u201d it said.\u00a0<\/p>\n
It added that the warning letter had no impact on the financial, operation or other activities of the company.<\/p>\n
The related-party transactions without approvals\u00a0were valued at \u20b9324 crore (services used by OCL from PPBL) and \u20b936 crore (services provided by OCL to PPBL).<\/p>\n
\u201cOn one hand, the company claimed that it had provided a cumulative numerical value of the transactions undertaken with PPBL by the company and its subsidiaries for reference by the shareholders, and that transactions between subsidiaries of OCL and PPBL do not qualify as RPTs [related-party transactions] during the FY 2021-22,\u201d SEBI\u2019s letter said.<\/p>\n
\u201cBut, on the other hand, the board and audit committee of the company have considered transactions between OCL and\/or its subsidiaries with PPBL as material RPTs and passed a resolution that RPTs with PPBL will be within the limits as mentioned therein the respective resolutions.\u201d<\/p>\n
SEBI has directed Paytm to place the administrative warning letter before its board of directors for corrective action and furnish an \u2018action taken report\u2019 within 10 days.<\/p>\n
Paytm share price fell by 1.47 per cent to\u00a0\u20b9462.25 apiece in early trade on BSE.\u00a0<\/p>\n