On Wednesday, search operations under the Prevention of Money Laundering Act (PMLA), 2002 were carried out by the Enforcement Directorate (ED) at six business and residential locations of banks and payment gateway offices in Delhi, Ghaziabad, Mumbai, Lucknow, Gaya, and 16 other locations.

In connection with its investigation into the fraud involving Chinese loan apps, the ED had conducted searches. The HPZ app-based token and associated organisations are involved in the investigation. The offices of Paytm, Razorpay, and Cashfree, three payment gateways that are reportedly used to facilitate transactions on unlicensed loan apps operated by Chinese-owned companies, were raided by the financial investigation agency.

Over Rs 46 crore frozen

The ED discovered incriminating documents during its investigation and enormous balances kept in the virtual accounts with payment aggregators of the accused firms. The agency discovered and frozen a sum totaling approximately Rs 46.67 crore in numerous bank accounts and virtual accounts.

There were four companies discovered: Easebuzz Private Limited, Pune, Razorpay Software Private Limited, Bangalore, Rs. 8.21 crore, Rs. 1.28 crore, and Rs. 1.11 crore with Paytm Payments Services Limited, New Delhi.

Based on a FIR dated October 8, 2021 submitted under various sections of the IPC by the Cyber Crime Police Station in Kohima, Nagaland, the agency started its investigation into money laundering.

Paytm denies freezing any funds

Issuing a statement on Friday, digital payments company Paytm called this “absolutely false news”. “As mentioned in our exchange filing, ED instructed us to freeze certain amount from MIDs of specific merchant entities and none of these funds belong to Paytm or our group companies,” it said.

Meanwhile, ED said further probe is in progress.

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TOPICS: Cashfree Paytm