New Delhi, September 4
Digital financial services company One97 Communications, which operates under the Paytm brand, on Sunday denied any links to merchants who are under the Enforcement Branch’s scanner in the Chinese loan app case. .
Paytm said none of the funds frozen by the Enforcement Directorate (ED) belong to it or any of its group companies.
“As part of ongoing investigations of a specific set of merchants, ED has sought information about those merchants to whom we provide payment processing solutions. We wish to clarify that these merchants are independent entities and that no ‘Them is not an entity of our group,’ Paytm said in a regulatory filing.
ED said on Saturday it had carried out raids on six premises of online payment gateways, such as Razorpay, Paytm and Cashfree in Bangalore, over alleged irregularities in app-based instant lending ‘monitored’ by Chinese people.
The search that began on Friday as part of an ongoing investigation is still ongoing, the agency said.
The Federal Investigative Agency also said that during the raids, it seized funds worth Rs 17 crore kept in “trader IDs and bank accounts of these entities controlled by Chinese persons”.
“It should be noted that the ED has asked us to freeze certain Merchant Identifier (MID) amounts of a specific set of Merchant Entities (as mentioned by the ED in its press release). note that none of the funds ordered to be frozen belong to Paytm or any of our group companies,” Paytm said.
The ED has launched an investigation under the criminal sections of the Prevention of Money Laundering Act (PMLA) after a number of cases of gullible debtors ending their lives emerged in various states, police stating that they were coerced and harassed by them. lending application (app) companies by posting their personal data available on their phones and adopting heavy-handed ways to threaten them.
It has been alleged that the companies obtained all of the loan taker’s personal data when downloading these apps to their phones, even though their interest rates were “usurious”.
The agency had said the alleged proceeds of crime in the case were routed through these payment gateways.
Speaking about the case in question, 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”.
“These entities are controlled/operated by Chinese people.”
“The said entities were found to be doing their suspicious/illegal activities through various merchant IDs/accounts held with payment gateways/banks,” the ED had said.
Paytm said it is cooperating fully with the authorities and that all actions in the directive have been duly complied with.