PAYTM-owner One97 Communications has received a show cause notice from India’s financial crime agency for alleged violations of the Foreign Exchange Management Act (FEMA) related to the acquisition of two subsidiaries.
In an exchange filing, Paytm stated that the Enforcement Directorate (ED) issued the notice on February 28, citing contraventions between 2015 and 2019 linked to the acquisition of Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL).
The company clarified that these violations relate to a period before the two firms became its subsidiaries.
"We hereby inform you that a show cause notice... has been received by the Company on February 28, 2025... from the Directorate of Enforcement. This is in relation to alleged contraventions for the years 2015 to 2019 of certain provisions of the 'FEMA' by the Company, in relation to its acquisition of two subsidiaries namely Little Internet Private Limited ('LIPL') and Nearbuy India Private Limited ('NIPL') erstwhile Groupon, along with certain Directors and Officers," Paytm stated.
The filing added that the notice alleges violations involving transactions worth over £55.5 million, with £22.3 million linked to One97 Communications, £31.3 million to LIPL, and £1.9 million to NIPL.
"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 statement said.
Paytm said it is addressing the matter in accordance with legal and regulatory processes and assured that its services remain unaffected.
"To resolve the matter in accordance with applicable laws and regulatory processes, the Company is seeking necessary legal advice and evaluating appropriate remedies," it stated.
Paytm acquired LIPL and NIPL in 2017. Groupon India, which later became Nearbuy, was founded in 2011 by Ankur Warikoo. In 2015, Warikoo and his team took over the business, making it an independent entity.
(With inputs from agencies)
