The shares of One97 Communications, the payment aggregator and parent company of Paytm, slumped 4% and hit an intraday low of Rs 683.55 on 3 March after the business received a FEMA violation notice.

Earlier on 28 February, the company received a FEMA violation notice from the Enforcement Directorate for its subsidiaries, Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL).

The notification relates to violations related to the acquisition of two businesses, Little Internet Private Limited and Nearbuy India Private Limited, for the years 2015 to 2019, the company said in a regulatory filing.

The warning has been distributed to One97 Communications, two of its acquired subsidiaries, LIPL and NIPL, as well as a few current and former officials and directors of the company and its two subsidiaries.

In its regulatory filing, the company added, “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.” 

The company added, “To resolve the matter in accordance with applicable laws and regulatory processes, the company is seeking necessary legal advice and evaluating appropriate remedies.” 

According to the company’s breakdown, the purported breach included OCL transactions worth over RS 245 crore, LIPL transactions for around Rs 345 crore, and NIPL transactions worth approximately Rs 21 crore.

The corporation also declared that it upholds the principles of compliance, transparency, and governance in every facet of its business operations.” 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,” Paytm said.

At 12:20 pm, the shares of Paytm were trading 0.69% lower at Rs 710.05 on NSE.

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