The Vijay Shekhar Sharma-led company One 97 Communications Ltd. (Paytm) said it received an administrative warning from the market regulator Sebi over related-party transactions it entered into with Paytm Payments Bank (PPBL) in FY22, without the proper approval of either the audit committee or the shareholders.
The fintech major stated that the letter has no impact on the company's finances, operations, or other activities.
Paytm previously said that it has given shareholders access to a cumulative numerical value of the company's and its subsidiaries' transactions with PPBL and that transactions between OCL subsidiaries and PPBL do not qualify as RPTs for the FY 2021–2022.
However, the Paytm board and audit committee saw as substantial RPTs all transactions involving OCL and/or its subsidiaries and PPBL.
"We take the aforementioned infractions extremely seriously. In light of this, you are now forewarned to exercise caution and raise your compliance standards in order to prevent future occurrences of this kind of behavior. If you do not, legal action will be taken, as per Sebi's statement.
The markets regulator said that when Paytm presented the letter to its board of directors for review and necessary remedial action, Sebi required that the action-taken report be sent to Sebi within ten days.
According to Paytm, the company has continuously complied with SEBI Listing Regulations Regulation 23 read with Regulation 4(1)(h), including any changes and modifications made to these rules over time.
"The company is committed to upholding and demonstrating the highest compliance standards and shall also submit its response to Sebi," stated the statement.
