![Paytm](https://img.etimg.com/thumb/msid-111769453,width-300,height-225,imgsize-39378,resizemode-75/paytm.jpg)
In response to the SEBI administrative warning, Paytm, said that it has consistently adhered to all listing regulations and will address SEBI's concerns with a detailed response.
SEBI's administrative warning, detailed in a letter dated July 15, 2024, and uploaded by One 97 Communications on the exchanges on Monday, focuses on related party transactions valued at ₹324 crore and ₹36 crore, respectively. These transactions, conducted during FY 2021-22, did not receive the requisite nod from either the audit committee or the shareholders, SEBI said.
SEBI's letter said that the transactions between Paytm and PPBL did not have formal approvals.
"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 letter said.
"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," the letter further stated.
The market regulator pointed out discrepancies between the company’s assertions of compliance and the transactions categorized as material related party transactions by the Board and Audit Committee. Despite this, Paytm has noted that it has complied with Regulation 23 read with Regulation 4(1)(h) of the SEBI Listing Regulations.
"The above violations have been viewed very seriously," SEBI said, adding that there should be caution in the future and an improvement in compliance standards to prevent such instances from happening again. Failure to do so could lead to initiation of appropriate enforcement action in accordance with the law, SEBI added.
SEBI instructed Paytm to present the letter to its board for corrective actions and to provide a report on the measures taken within 10 days thereafter.
Paytm's shares dropped 2% to Rs 461.1 during Tuesday's trading session on BSE, while the broader market was trading in the positive zone.
"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 financial, operational, or other activities of the company pursuant to the above-mentioned letter," Paytm said in a stock exchange filing on Monday night.
In its response, the company emphasised its longstanding adherence to regulatory requirements and commitment to high compliance standards. Paytm assured that this warning will not affect its financial, operational, or other activities. The company is taking steps to address SEBI's concerns and enhance compliance protocols to prevent such issues in the future, it said.
"Paytm remains dedicated to maintaining transparency and integrity in all its operations, ensuring adherence to regulatory requirements and the highest standards of corporate governance," the company stated.
Paytm has reiterated that it will provide a comprehensive response to SEBI’s concerns and maintain open communication with the regulatory body.
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.
Read More News on
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.