Paytm shares in focus after administrative warning from Sebi; key details

Shares of One 97 Communications Ltd (Paytm) are in focus on Monday morning after the Vijay Shekhar Sharma-led company said it received an administrative warning from the maket regulator Sebi over related-party transactions it entered into with Paytm Payments Bank (PPBL) in FY22, without due approval of either the audit committee or the shareholders.

There is no impact on financial, operation or other activities of the company pursuant to the letter, the fintech major said.

Paytm earlier claimed that it had provided a cumulative numerical value of the transactions undertaken with PPBL by the company and its subsidiaries for shareholders' reference and that transactions between subsidiaries of OCL and PPBL do not qualify as RPTs during the FY 2021-22.

But the board and audit committee of Paytm considered transactions between OCL and/ or its subsidiaries with PPBL as material RPTs.

"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," Sebi said.

Sebi asked Paytm to place the letter before its board of directors for its information and necessary corrective action, post which the action-taken report needs be submitted to Sebi within 10 days thereafter, the markets regulator said.

Paytm said 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," it said.