One97 Communications Ltd, the parent company of Paytm has received an administrative warning from the Securities and Exchange Board of India (SEBI) regarding related party transactions with its Payments Bank. According to the sources, the warning from the market regulator has come citing certain transactions in the financial year 2022 between Paytm and the now discontinued Paytm Payments Bank without approval from the companys audit committee or its shareholders.Paytms ResponseIn response to SEBIs concerns, Paytm said in its stock exchange filing that it is dedicated to maintaining and proving the highest compliance standards and will provide a thorough response.Paytm in its stock exchange filing on Monday mentioned that the company believes that it has consistently complied with Regulation 23 read with Regulation 4(1)(h) of the SEBI Listing Regulations, including any amendments and updates to these regulations over time. It further says the company is committed to upholding and demonstrating the highest compliance standards.Paytm further asserted that it remains dedicated to maintaining the discrepancy and integrity in all operations.SEBIs WarningSEBI in its warning has underscored the discrepancies between the companys stated compliance and the transactions considered material (RPTs) by the Board and Audit Committee. Its warning indicates that the transactions in question might not have complied with the required regulatory standards.The warning concerns the excessive related party transactions (RPTs) that Paytm and/or its subsidiaries allegedly engaged in with Paytm Payments Bank Limited (PPBL) in FY 2021–2022, alleging that these transactions were carried out without the required consent of the audit committee or shareholders.This action highlights the need for greater scrutiny and compliance in financial dealings, particularly in related party transactions, to ensure transparency and fairness. The specifics of the transactions and the potential implications for Paytm and its Payments Bank are currently being reviewed.
