Paytm faces Enforcement Directorate raids

By

Isabelle Crossley

Published
Sep 15, 2022

Paytm and PayU saw Enforcement Directorate raids at a number of their locations in Delhi, Mumbai, Gurugram, Kolkata, and Lucknow as the government agency investigates the business in connection with its ongoing investigation into Chinese loan apps. 

The Enforcement Directorate is investigating 18 first information reports registered by the Cyber Crime Police Station in Bengaluru for alleged harassment and extortion of members of the public who had availed small loans from Chinese loan apps, ET Bureau reported. The Enforcement Directorate searched Paytm premises after finding that some of the entities suspected of fraudulently obtaining funds have been carrying out their operations through numerous merchant IDs and accounts held with payment gateways including Paytm. 
 
“During enquiries, it had emerged that these entities are operated by Chinese persons,” the Enforcement Directorate said in a statement, Indo-Asian News Service reported. “The modus operandi of these entities is that by using forged documents of Indians and making them dummy directors of those entities, they are generating proceeds of [a] crime.” 

The Enforcement Directorate has also investigated other digital payments businesses in India including Razorpay and Cashfree Payments. Search operations as part of the operation are ongoing, according to the Enforcement Directorate. 
 
“During the search operations, it was noticed that the said entities were generating proceeds of [a] 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. An amount of Rs 17 crore has been seized in merchant IDs and bank accounts of these Chinese persons-controlled entities.”