 "Paytm denies deferral of approval or fine on payments services arm")
Financial technology giant Paytm refuted media reports on Tuesday claiming that the company had not received any communication regarding the deferral of its subsidiary Paytm Payment Services’ (PPSL’s) licence application and any associated penalties.
This clarification follows reports suggesting that the government deferred the approval of Paytm’s Rs 50 crore investment in PPSL due to concerns about Chinese shareholding in the parent company.
PPSL, a wholly owned subsidiary of One97 Communications (OCL), operates under the Paytm brand.
“To clarify, the investment of Rs 50 crore was made from OCL’s existing cash reserves, and no Chinese capital was raised by OCL after the introduction of Press Note 3 of 2020. Furthermore, Rs 50 crore was the capital required to comply with the Reserve Bank of India’s (RBI’s) minimum networth rules and fund the cash requirements of PPSL,” the company stated in a blog post.
The company also emphasised that investor Ant Financial (Antfin) had no board representation or special rights.
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“Paytm, an Indian company founded by an Indian citizen, with our founder chief executive officer as the largest shareholder and sole significant beneficial owner of OCL, underscores its commitment to indigenous entrepreneurship and innovation. All key managerial personnel and board members of OCL are of Indian origin, with Antfin having no board representation or special rights,” it added.
Paytm founder Vijay Shekhar Sharma holds the largest stake in OCL, with an aggregate shareholding of 19.4 per cent, including shares held by his wholly-owned companies.
Antfin reduced its stake in OCL to 9.88 per cent in August last year.
PPSL had previously applied for an online payment aggregator (PA) licence for online merchants.
“The ongoing application process has seen us promptly provide the requested information, with no indication of rejection or penalties involved,” the company said.
It further said that the formation of PPSL, transfer of online payments business from OCL to PPSL, and investment of capital in PPSL were required by RBI’s guidelines, which mandated that the PA business should be housed in an independent legal entity.