Business news: Paytm on Monday (February 5) issued a statement denying reports of an Enforcement Directorate investigation or violation of Foreign Exchange rules by the company or its associate Paytm Payments Bank Limited. This comes after Reuters, quoting two senior officials, claimed that the ED was probing the company, however, there was no formal communication thus far. Paytm’s parent company, One97 Communications Limited (OCL), claimed that the reports are “entirely misleading, baseless and malicious”.
What did the company say?
“The Company filed a specific clarification yesterday, categorically denying any investigation by the Enforcement Directorate on OCL, our associates and our management. We have since seen additional media reports making baseless speculations about investigations of the Company or its associate Paytm Payments Bank Limited (PPBL) for violation of foreign exchange rules,” Paytm said.
“We would like to reiterate that the Company and its associate Paytm Payments Bank Limited are not the subject matter of any such investigation. Such media reports are entirely misleading, baseless and malicious, which harm the interests of all our stakeholders,” it added.
What happened so far?
The development comes amid speculations over the company’s operations following Reserve Bank of India’s action against its associate Paytm Payments Bank. The Payments bank was asked to stop key operations from March 1 due to non-compliance.
Paytm said on Sunday said that neither the company nor Vijay Shekhar Sharma, the CEO of One97, is currently under investigation by the enforcement directorate for money laundering.
The Reserve Bank of India (RBI) had raised concerns about the creation of numerous accounts at the bank without proper identification, suspecting potential money laundering activities.
"Neither the company nor its founder and CEO are being investigated by the Enforcement Directorate regarding money laundering. In the past, certain merchants and users on our platforms have been subject to inquiries, and on those occasions, we have always cooperated with the authorities. During any such investigations by the authorities on any set of merchants and users in the past, we have cooperated with them on these investigations," the company said in an exchange filing.
Paytm Payments Bank Ltd (PPBL) has been instructed by the central bank to cease several of its operations, including accepting new deposits, engaging in credit transactions, and facilitating top-ups for customer accounts, prepaid instruments, wallets, and cards used for paying road tolls, after February 29.
Customers will retain access to their current deposits and can use the funds in their wallets for services until the end of February. If the Reserve Bank of India (RBI) maintains its position, the ability to top up Paytm wallets will be discontinued, and transactions through the platform will no longer be possible.
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