Paytm shares decline 2% after SEBI warning on related party transactions with payments bank
Paytm and the now-defunct Paytm Payments Bank were conducted without approval from the company's audit committee or its shareholders.
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 Rs 324 crore and Rs 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
