PB Fintech subsidiary Paisabazaar under IT scanner over vendor payments

PB Fintech Limited's subsidiary, Paisabazaar, has received notices from the Income Tax Department concerning certain vendor payments, the company disclosed in a regulatory filing on November 28, 2024.

The notices, issued by the Deputy Director of Income Tax and the Assistant Commissioner of Income Tax in Delhi, seek explanations regarding the transactions and services provided by certain vendors and related entities. One of the notices is issued under the Prohibition of Benami Property Transactions Act, 1988, while the other is under section 142(1) of the Income Tax Act, 1961.

Paisabazaar has committed to providing the required responses to the authorities within the designated timeline. However, the company has stated that it is currently unable to estimate any potential financial impact from these notices.

Earlier in June, PB Fintech shared that securities market regulator, SEBI, had issued a notice to Yashish Dahiya, the comapny's Chairperson and CEO, regarding a potential violation of rules. The notice, dated June 5, 2024, was about a Rs 2 million investment made by PB Fintech’s Dubai-based unit in YKNP Marketing Management in November 2022. The company had not classified this transaction as sensitive information at the given time, given the relatively small amount involved.

The notice alleged a breach of insider trading rules. PB Fintech stated that this notice does not affect its finances or operations and that it is consulting legal experts to respond appropriately.

The SEBI notice raised concerns about a potential breach of insider trading regulations. In response, PB Fintech stated that this issue does not have any impact on the company’s finances or operations. The company also said that it is consulting with legal experts to send an appropriate response and address the matter in accordance with regulatory requirements.

More recently, the company announced a reorganisation of its board committees effective October 17, 2024. Independent directors Nilesh Bhaskar Sathe and Kitty Agarwal joined the audit committee, chaired by Kaushik Dutta, replacing Chairperson and CEO Yashish Dahiya, who stepped down.