PPBL is 49% owned by listed One97 Communications and 51% held by founder-promoter Vijay Shekhar Sharma .
If the auditor qualifies its accounts to state that the company is not a going concern it could impede the firm’s plan to get a payment aggregator licence for Paytm Payments Services Ltd. PPBL didn’t respond to queries.
“Our professional code of conduct does not permit us to comment on client matters,” it told ET.
“In fact, the opportunity to rectify compliance matters has passed and now it is directed to wind down operations and transfer all businesses to One97 Communications.”The RBI did not respond to ET's email seeking comments.The central bank banned Paytm Payments Bank Ltd (PPBL) from accepting new deposits starting March 15.
The RBI's restrictions, which are still in place, stemmed from the company's failure to comply with know your customer (KYC) guidelines.
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Mumbai: Paytm Payments Bank Ltd (PPBL) is at loggerheads with auditor JC Bhalla & Co., which has told the company it will have to qualify certification of accounts for FY24 with remarks that reflect concerns over viability, given that business has come to a virtual standstill due to regulatory curbs , according to three people with knowledge of the matter. The auditor’s qualifications relate to whether the company is a ‘going concern’ or not.PPBL has opposed the auditor’s suggested qualification, arguing that the Paytm brand is robust enough to support a revival plan and that capital will be infused in order to do so. PPBL is 49% owned by listed One97 Communications and 51% held by founder-promoter Vijay Shekhar Sharma . If the auditor qualifies its accounts to state that the company is not a going concern it could impede the firm’s plan to get a payment aggregator licence for Paytm Payments Services Ltd. PPBL didn’t respond to queries. JC Bhalla & Co. declined to comment. “Our professional code of conduct does not permit us to comment on client matters,” it told ET. “Hence we are unable to offer any comments.”Sources close to the development said efforts are underway to convince the auditors to accept a management representation on the viability of the business or a legal opinion to that effect.The senior management of One97 Communications is seeking Reserve Bank of India (RBI) intervention, one of the three people cited above said. It is, however, unlikely that the central bank will intervene until the annual report is filed since the matter is between the management and the auditor.“RBI has not given any indication to the PPBL that it would be allowed to resume operations (such as mobilise deposits and onboard new customers) nor has it set conditions such as completing KYC of accounts to restore permissions,” the person cited above said. “In fact, the opportunity to rectify compliance matters has passed and now it is directed to wind down operations and transfer all businesses to One97 Communications.”The RBI did not respond to ET's email seeking comments.The central bank banned Paytm Payments Bank Ltd (PPBL) from accepting new deposits starting March 15. Since then, net worth has eroded, no income has been generated and it doesn’t appear to have any prospects of being able to do so. The RBI's restrictions, which are still in place, stemmed from the company's failure to comply with know your customer (KYC) guidelines. These guidelines require face-to-face verification and the collection of officially valid documents.
