Paytm Management Gets SEBI Notice Over Timing of 2023 Loan Curb Announcement

NEW DELHI:
Shares of One 97 Communications Ltd — a parent firm of Paytm — traded lower on Thursday after the fintech firm informed that its top management received a show‑cause notice over the timing of its 2023 announcement that curtailed small personal loans.

As of around 11:45 am, Paytm stock decreased as much as 0.42 per cent to hit an intraday low of Rs 1,598.60 on the BSE as the Securities and Exchange Board of India (SEBI) issued the notice over the timing of a December 2023 announcement curbing small personal loans following a ‌central bank clampdown.

SEBI issued the notice to key management personnel of the firm including Chief Executive Vijay Shekhar Sharma and Chief Financial Officer Madhur Deora, Paytm said.

According to the market regulator, the executives have 14 days to respond, Paytm added.

The notice was regarding the timing of disclosure of certain information and its classification as unpublished price sensitive information, concerning the Company’s Corporate Announcement dated December 6, 2023, the exchange filing said.

Paytm’s statement under scrutiny mentioned that it would issue fewer sub‑Rs 50,000 personal loans after the Reserve Bank of India tightened rules on consumer lending.

In addition, the announcement had triggered a 20 per cent fall in its shares the next trading day.

The RBI had tightened rules on small‑value personal loans about three weeks before Paytm’s announcement, imposing higher capital requirements over a surge in such lending.

Paytm’s shares had dipped about 12 per cent in the eight days leading up to the December 6 announcement.

SEBI’s show‑cause notices form part of probes that seek responses from accused persons and entities and if the regulator upholds allegations, those named could face monetary penalties or restrictions under Indian securities laws.