Paytm parent gets SEBI warning for related party transactions with PPBL
SEBI has warned OCL to improve its compliance standards to avoid future violations, and required the company to present this warning to its Board of Directors and submit a corrective action report within 10 days.
Paytm parent One 97 Communications Ltd (OCL) has received a warning letter from the Securities Exchange Board of India (SEBI) for unapproved related party transactions.
SEBI found that during the financial year 2021-22, OCL and its associate, PayTM Payments Bank Limited (PPBL), engaged in related party transactions without the required approvals from either the audit committee or shareholders, paytm said in an exchange filing.
In the financial year 2021-2022, OCL and Payments Bank conducted transactions totaling Rs 2,395 crore for availing or rendering services. However, only transactions amounting to Rs 2,035 crore were approved, as stated in the SEBI notice attached to the filing.
Although OCL claimed it provided transaction details for shareholder reference and argued that transactions between its subsidiaries and PPBL didn’t qualify as related party transactions, SEBI disagreed.
"The above violations have been viewed very seriously. You are, therefore, warned to be careful in
future and improve your compliance standards to avoid recurrence of such instances in future,
failing which appropriate enforcement action would be initiated in accordance with the law," the SEBI letter said.
SEBI warned OCL to improve its compliance standards to avoid future violations, and required the company to present this warning to its Board of Directors and submit a corrective action report within 10 days.
Despite this, OCL stated that its financial and operational activities remain unaffected and that they will respond to SEBI accordingly.
"The 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," Paytm stated in the exchange filing.
Edited by Megha Reddy
