SEBI Issues Administrative Warning to One 97 Communications

Paytm’s parent company, One 97 Communications, received an administrative warning letter from market regulator SEBI over related party transactions conducted by the company with Paytm Payments Bank for FY22.

SEBI said these transactions lacked approval from the audit committee and shareholders. Following this, Paytm said it has consistently adhered to all listing regulations and will address SEBI’s concerns with a detailed response.

Details of the Transactions on One 97 Communications:

SEBI’s administrative warning focuses on related party transactions valued at ₹324 crore and ₹36 crore, respectively. SEBI said these transactions were conducted during FY 2021-22 and were not approved by either the audit committee or the shareholders.

The markets regulator noted in the letter, “On one hand, the company claimed that it had provided a cumulative numerical value of the transactions undertaken with PPBL by the Company and its subsidiaries for reference by the shareholders and that transactions between subsidiaries of OCL and PPBL do not qualify as RPTs during the FY 2021-22.”

SEBI’s Observations:

SEBI added, “But, on the other hand, the Board and Audit Committee of the Company have considered transactions between OCL and/or its subsidiaries with PPBL as material RPTs and passed a resolution that RPTs with PPBL will be within the limits as mentioned therein the respective resolutions.”

Paytm’s Response to SEBI Warning:

Paytm said, “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.

The company is committed to upholding and demonstrating the highest compliance standards and shall also submit its response to SEBI. There is no impact on the company’s financial, operational, or other activities pursuant to the above-mentioned letter.”

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