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

Representative pic of apps on mobile screenIMAGE FOR REPRESENTATION ONLY
Money Scam Saturday, September 03, 2022 - 16:54

The Enforcement Directorate Saturday said it is conducting raids at Bengaluru premises of online payment gateways like Razorpay, Paytm and Cashfree as part of an ongoing probe against "illegal" instant smartphone-based loans "controlled" by Chinese persons. The searches were launched Friday at six premises in Karnataka's capital city, it said in a statement. The search operation is in progress, the Enforcement Directorate said.

The federal probe agency said it has seized Rs 17 crore worth funds kept in "merchant IDs and bank accounts of these Chinese persons-controlled entities", during the raids. The modus operandi of these entities is that they use forged documents of Indians and make them dummy directors leading to generation of "proceeds of crime", it alleged. "These entities are controlled/operated by Chinese persons," it said.

"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 premises of Razorpay Pvt Ltd, Cashfree Payments, Paytm Payment Services Ltd and entities controlled/operated by Chinese persons are covered in the search operation," the ED said. The entities under investigation were generating proceeds of crime through various 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, the agency said.

The ED said its money laundering case is 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."

"We extended our diligent cooperation to the ED operations, providing them the required and necessary information on the same day of enquiry. Our operations and on-boarding processes adhere to the PMLA and KYC directions, and we will continue to do so," Cashfree said in a statement. 

Paytm said as a part of ongoing investigations on a specific set of merchants, the ED has sought information regarding such merchants to whom it provides payment processing solutions. "It is hereby clarified that these merchants are independent entities, and none of them are our group entities. We are, and will continue to, fully cooperate with the authorities, and all the directive actions are being duly complied with," the company added. 

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