Paytm has responded to an administrative warning from the Securities and Exchange Board of India (SEBI), asserting its consistent adherence to listing regulations, including any amendments and updates.
The warning, issued on Monday, addressed certain related party transactions (RPTs) between Paytm and its banking unit, Paytm Payments Bank Limited (PPBL), during FY22. These transactions, reportedly amounting to Rs 360 crore each, were allegedly conducted without the necessary approvals from either the audit committee or shareholders. Paytm has not denied these claims.
SEBI labeled the violations as “very serious,” warning that similar lapses in the future could attract strict actions. “You are, therefore, warned to be careful in future and improve your compliance standards to avoid recurrence of such instances, failing which appropriate enforcement action would be initiated in accordance with the law,” SEBI stated in its warning letter to Paytm.
In its response, Paytm reaffirmed its commitment to compliance standards and indicated it would submit a detailed response to SEBI. The company also stated that there is no impact on its financial, operational, or other activities due to the warning.
“… There is no impact on financial, operational or other activities of the company pursuant to the above-mentioned letter,” Paytm stated in its exchange filing on Monday night.
Despite these assurances, the fintech company faces growing scrutiny for pushing regulatory boundaries, a holdover from its startup days. Paytm has taken longer than most to adjust to the compliance expectations of the public markets.
