The Directorate of Law Enforcement (ED) on Wednesday carried out new raids against online payment gateway company Paytm and some other agencies in an ongoing investigation into money laundering linked to alleged financial irregularities by loan companies based on Chinese-controlled instant apps, agencies reported, citing official sources. They said premises linked to some payment gateway operators, some companies engaged in these lending app transactions and operators in about three states were being raided.
A Paytm spokesperson said the action was related to the same case the agency began researching earlier this month.
Reuters reported that searches were also carried out at PayU’s premises, but said the company and ED did not immediately respond to its request for comment.
“As we mentioned earlier, ED continues to seek certain merchant information from various payment service providers, we have shared the required information,” Paytm said.
Earlier this month, the investigative agency raided the premises of Paytm and two other payment solution providers – Razorpay and Cashfree – in Bangalore in connection with a money laundering case. money against certain lending entities based on instant applications “controlled” by Chinese people.
Also Read: Paytm Says There’s No Link to Chinese Lending Merchants Under ED Scanner
The ED then said that during the raids it seized funds worth Rs 17 crore kept in “trader ID cards and bank accounts of these entities controlled by Chinese persons”. .
The three companies then responded by saying they were cooperating with the federal agency, with the Paytm spokesperson saying the company was “supporting law enforcement, which is investigating a specific set of merchants.” Cashfree Payments said its “operations and onboarding processes adhere to PMLA and KYC guidelines, and we will continue to do so.”
The ED had stated that the entities under investigation generated proceeds of crime through various merchant IDs/accounts held with payment gateways/banks and also did not operate through from the addresses given on the website/registered address of the Ministry of Commercial Affairs. The ED said the “modus operandi” of these entities was that they used false documents of Indians and turned them into bogus directors leading to the generation of “proceeds of crime”.
The ED also said that this money laundering case was based on at least 18 FIRs filed by the Bengaluru Police Cybercrime Station against “numerous entities/persons in relation to their involvement in extortion and harassment of the public who had benefited from a small amount of loans through the mobile applications operated by these entities/persons.”
Last week, the government asked the RBI to prepare a list of legal apps and MeitY to ensure that only those whitelisted apps are hosted on the app stores. In a high level meeting at the Ministry of Finance, it was also decided that RBI would monitor ‘mule/leased’ accounts which could be used for money laundering and also review/cancel inactive NBFCs to prevent their use. abusive.