Fresh ED raids on Paytm, PayU, others in Chinese loan money laundering case | The Financial Express

Fresh ED raids on Paytm, PayU, others in Chinese loan money laundering case

The ED then said that during the raids, it seized Rs 17 crore worth of funds kept in “merchant IDs and bank accounts of these Chinese persons-controlled entities”.

Fresh ED raids on Paytm, PayU, others in Chinese loan money laundering case
Reuters reported searches were conducted on the premises of PayU, as well, but said the firm and ED did not immediately respond to its request for comment.

The Enforcement Directorate (ED) on Wednesday carried out fresh raids on online payment gateway firm Paytm and some other agencies in connection with an ongoing money laundering probe linked to alleged financial irregularities by instant app-based loan companies “controlled” by Chinese persons, agencies reported, quoting official sources. They said premises linked to certain payment gateway operators, some companies engaged in these loan app transactions and operators in around three states are being searched.

A spokesperson for Paytm said the action was linked to the same matter where the agency had undertaken searches earlier this month.

Reuters reported searches were conducted on the premises of PayU, as well, but said the firm and ED did not immediately respond to its request for comment.

“As we have mentioned before, ED continues to seek information about certain merchants from various payment service providers, we have shared the required information,” Paytm said.

Earlier this month, the probe agency had raided the premises of Paytm and two more payment solutions providers – Razorpay and Cashfree – in Bengaluru, as part of a money laundering case against some instant app-based loan dishing entities “controlled” by Chinese persons.

Also Read: Paytm says no link with Chinese loan merchants under ED scanner

The ED then said that during the raids, it seized Rs 17 crore worth of funds kept in “merchant IDs and bank accounts of these Chinese persons-controlled entities”.

The three companies then responded by saying they were cooperating with the federal agency, with the Paytm spokesperson saying the firm was “supporting law enforcement agencies, who are investigating a specific set of merchants.” Cashfree Payments said their “operations and onboarding processes adhere to the PMLA and KYC directions, and we will continue to do so.”

The ED had said the entities under investigation were generating proceeds of crime through various merchant IDs/accounts held with payment gateways/banks and they were also not operating from the addresses given on the ministry of corporate affairs’ website/registered address. The ED said the “modus operandi” of these entities was that they use forged documents of Indians and made them dummy directors leading to the generation of “proceeds of crime”.

The ED also said this money laundering case was based on at least 18 FIRs filed by the Bengaluru Police cyber crime station against “numerous entities/persons in connection with their involvement in extortion and harassment of the public who had availed small amount of loans through the mobile apps being run by those entities/persons.”

Last week, the government asked the RBI to prepare a list of legal apps and MeitY to ensure only these white-listed Apps are hosted on app stores. At a high-level meeting in the finance ministry, it was also decided that RBI will monitor ‘mule/rented’ accounts that may be used for money laundering and will also review/cancel dormant NBFCs to avoid their misuse.

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