‘Consistently acted in compliance’, Paytm on SEBI’s administrative warning

In a response to the SEBI administrative warning, fintech company Paytm said that it has consistently adhered to all listing regulations from time to time, including any amendments and updates to these regulations.

On Monday, Paytm received an administrative warning from India's markets regulator for certain transactions with its banking unit in the fiscal year FY22.

The warning pertains to the excess related party transactions (RPTs) entered into by Paytm and its subsidiaries with Paytm Payments Bank Limited (PPBL) during FY22, which were allegedly conducted without the due approval of either the audit committee or shareholders. Paytm has not denied these claims.

As per a Reuters report, the warning was related to two transactions with an unapproved amount of Rs 360 crore each.

The regulator noted that the violations were “very serious” and could attract strict actions if such lapses occur. 

“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 in its warning letter to Paytm.

Meanwhile, Paytm said that it is committed to the compliance standards and will submit a detailed response to SEBI. 

“... There is no impact on financial, operation or other activities of the company pursuant to the above-mentioned letter,” Paytm said in its exchange filing on Monday night.

While that might be true with respect to day to day matters, the fact remains that the firm needs to do much more regarding its increasing reputation for pushing the boundaries of rules. It’s fast turning into one of the longest hangovers from life as a startup, and Paytm has taken longer than most to adjust to the new realities of public markets.