ED raids Paytm, PayU offices across various metro cities in Chinese loan apps case

The Enforcement Directorate was conducting searches on certain premises of One 97 Communications Ltd’s Paytm and payment solutions provider PayU, according to a Reuters report. The raids are in in connection with a case pertaining to Chinese loan apps.

The raids were going on in Mumbai, Delhi, Gurugram, Lucknow and Kolkata, according to an IANS report. The ED has not given any official comment on the matter.

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

Part of ongoing probe

On September 3, the ED had conducted raids at Bengaluru premises of online payment gateways such as Razorpay, Paytm and Cashfree Payments as part of an ongoing probe against “illegal” instant smartphone-based loans “controlled” by Chinese persons.

Also read: ED raids Bengaluru offices of Razorpay, Paytm & Cashfree

The searches were conducted at six premises in Karnataka’s capital city, the ED had said in a statement.

The case is based on 18 FIRs registered by Cyber Crime Police Station, Bengaluru City, against numerous persons for their involvement in extortion and harassment of the public who had availed small loans through the mobile apps being run by those entities.

The federal probe agency informed that it has seized Rs 17 crore worth of funds kept in “merchant IDs and bank accounts of these Chinese persons-controlled entities” during the raids.

The modus operandi

The modus operandi of these entities is that they use forged documents of Indians and make them dummy directors, leading to the generation of “proceeds of crime”, ED had alleged.

“These entities are controlled/operated by Chinese persons,” it added. “It has come to notice that the said entities were doing their suspected/illegal business through various merchant IDs/accounts held with payment gateways/banks.”

The agency said that the entities under investigation were generating proceeds of crime via several merchant IDs/accounts held with payment gateways/banks, and they are also not operating from the addresses given on the MCA (ministry of corporate affairs) website/registered address and they have “fake” addresses.

Also read: ED raids crypto exchange WazirX director; freezes bank assets worth ₹64.7 cr

Meanwhile, a Razorpay spokesperson had said “Some of our merchants were being investigated by law enforcement about a year and a half back. As part of the ongoing investigation, the authorities requested additional information to help with the investigation. We have fully cooperated and shared KYC and other details. The authorities were satisfied by our due diligence process.”