Paytm clarifies status of licensing process, says no deferral notice on investment in payments arm
Paytm refuted ‘speculative’ reports suggesting that the Indian government deferred the approval of Paytm’s $6 million investment in PPSL over concerns about Chinese shareholding in One 97 Communications, the parent company.
Paytm on Wednesday refuted media reports that the central government had deferred approval for the fintech unicorn's investment in its troubled payments arm.
The clarification came after Reuters on April 16 cited officials and a document to report that the Indian government had deferred Paytm's $6 million investment in Paytm Payments Services (PPSL). As per the report, the government is concerned about Chinese shareholding in One 97 Communications, the parent of Paytm.
In a blog post titled 'Government Champions Fintech: Paytm’s PPSL License Journey Progresses', the company said it is "dedicated to providing users with uninterrupted payment experience" and “by pioneering mobile payments, QR technology and Soundbox devices”, it is extending financial services to the rural heartlands of India.
What Has Paytm Said?
However, in the statement, Paytm called the Reuters report "speculative", adding that the government "has consistently championed fintech initiatives".
"The source-based information appears speculative, as the government has consistently championed fintech initiatives. The ongoing application process has seen us promptly provide the requested information, with no indication of rejection or penalties involved," a Paytm spokesperson said in the statement.
"Aligning with the government’s vision, supporting Paytm as a homegrown entity is pivotal for empowering Indian companies to compete globally and drive technological advancements. Their backing ensures seamless payment services for SMEs, preserving trust and fostering digital growth for businesses and consumers," it added.
The statement also addressed the issue of Chinese shareholding. "Paytm, an Indian company founded by an Indian citizen, with our Founder CEO as the largest shareholder and sole SBO (Significant Beneficial Owner) of One 97 Communications Limited (OCL), underscores its commitment to indigenous entrepreneurship and innovation. All KMPs (Key Managerial Personnel) and Board members of OCL are of Indian origin, with Antfin having no Board representation or special rights. As clarified, the formation of PPSL, transfer of online payments business, and the investment of ₹500 million were undertaken to comply with RBI’s regulations," it said.
With regards to ownership of the company, the statement said Founder-CMD Vijay Shekhar Sharma is the single-largest shareholder of OCL with an aggregate shareholding of 19.4 per cent, including shares held by his wholly owned companies. Ant Financial reduced its stake in OCL to less than 10 per cent in August 2023, it added.
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First Published:17 Apr 2024, 02:25 PM IST
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