ED raids Razorpay, Paytm in Chinese loan app case

New Delhi, September 3

The Enforcement Directorate (ED) has conducted raids on six premises of online payment gateways such as Razorpay, Paytm and Cashfree in Bengaluru over alleged irregularities in instant app-based loans “controlled” by Chinese nationals.

The searches that started on Friday as part of an ongoing probe are still underway, the agency said today.

The ED said it had seized Rs 17 crore kept in “merchant IDs and bank accounts of these Chinese persons-controlled entities” during the raids. The modus operandi of these entities is that they use forged documents of Indians and make them dummy directors, leading to generation of “proceeds of crime”, the agency alleged.

The entities under probe were generating proceeds of crime through various merchant IDs held with payment gateways/banks and they were also not operating from the addresses given on the website of the Ministry of Corporate Affairs, the agency alleged. Razorpay and Cashfree responded by saying they were cooperating with the federal agency, while Paytm refused to comment. “We have fully cooperated and shared KYC and other details. The authorities were satisfied by our due diligence process,” Cashfree Payments said.

Debtors harassed

• The ED initiated a probe after instances of gullible debtors ending their lives came to the fore
• Debtors were harassed by loan app companies by publicising their personal details available in their phones
• Rs 17 cr kept in ‘merchant IDs and bank accounts of these Chinese persons-controlled entities’ seized