The offices of online payment gateways Paytm, Razorpay and Cashfree in Bengaluru have been raided by the Enforcement Directorate in connection with its probe into illegal instant smartphone-based loans “controlled” by Chinese persons.
The federal anti-money laundering probe began on Friday and continued on Saturday. Rs 17-crore worth of funds kept in “merchant IDs and bank accounts of these Chinese persons-controlled entities” were seized during the probe.
The agency initiated a probe under the Prevention of Money Laundering Act (PMLA) after taking over at least 18 first information reports (FIRs) registered by the Cyber Crime Police Station of Bengaluru police against numerous entities and persons.
“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,” a Razorpay spokesperson said, adding, “We have fully cooperated and shared KYC and other details. The authorities were satisfied by our due diligence process.”
Cashfree Payments said their “operations and on-boarding processes adhere to the PMLA and KYC directions, and we will continue to do so. We extended our diligent co-operation to the ED operations, providing them the required and necessary information on the same day of enquiry.”
Paytm declined to comment.
The ED 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.”
Their modus operandi, the ED statement said, is “to use forged documents of Indians and make them as dummy directors of those entities” to launder proceeds of crime.
“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 statement by the ED said. The ED probe found these companies had “fake” addresses.