The statement comes after the
ED searched half a dozen offices belonging to online payment gateways such as Razorpay, Paytm and Cashfree in Bengaluru in connection with its probe into the Chinese loan app scam. The searches were made under provisions of the Prevention of Money Laundering Act (PMLA), the agency said in a statement on Saturday.
“As a part of ongoing investigations on a specific set of merchants, the ED has sought information regarding such merchants to whom we provide 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,” Paytm said in a fresh statement.
It added that none of the merchant IDs asked to be frozen by the ED belonged to Paytm or its group entities.
“It may be noted that ED has instructed us to freeze certain amounts from the merchant IDs (MIDs) of a specific set of merchant entities (as mentioned by the ED in their press release). It may be further noted that none of the funds which have been instructed to be frozen belong to Paytm or any of our group companies,” the Noida-based firm added.
The ED has launched an investigation on the basis of 18 first information reports (FIRs) registered by the Cyber Crime Police Station, Bengaluru, against numerous entities and individuals.
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“During enquiries it has emerged that these entities are controlled/operated by Chinese individuals,” the ED said, adding it had seized Rs 17 crore “in merchant IDs and bank accounts of these Chinese persons-controlled entities.”
The case has to do with predatory lending apps that lured people with apparently easy loans. In some instances, money was paid into customer accounts even without explicit loan applications. This was followed by escalating harassment, including threats to send morphed photographs to people in their contact lists unless repayments were made at usurious rates of interest.
The lending and recovery transactions of these lending apps were routed through payment gateways. In February 2021, the ED’s Hyderabad zone had summoned officials of Razorpay, Cashfree and Paytm. Subsequently, the statements of Razorpay CEO Harshil Mathur, Paytm CFO Vikas Garg and Cashfree CEO Akash Sinha were recorded, sources said.
ET
reported on August 24, citing sources, that ED has found alleged proceeds of crime of over Rs 800 crore as part of a long-drawn money laundering probe against 365 fintechs and their non-banking financial company (NBFC) partners in the Chinese loan app scam.
The ED in a statement said during the searches it found that “the said entities 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 website/registered address and having fake addresses.”
