The Enforcement Directorate on Wednesday conducted raids on some premises of One 97 Communications and online payment service provider Pay U, according to a report by Reuters. The development comes days after the government agency conducted raids in offices of Razorpay, Paytm and Cashfree in Bengaluru, last week.
A Paytm spokesperson said, “As we have mentioned before, ED continues to seek information about certain merchants from various payment service providers, and we have shared the required information."
On September 2, the ED conducted raids in six locations of Razorpay, Paytm, and Cashfree, as part of an ongoing probe against “illegal” instant smartphone-based loans “controlled” by Chinese persons. The central agency said that it had seized Rs 17 crore worth funds during the raids. These funds were stashed in the merchant ID’s and bank accounts of these Chinese entities.
The federal agency alleged that the modus operandi of these Chinese entities is by using forged documents of Indians and making them dummy directors, which leads to the generation of “proceeds of crime.”
ED said, “These entities are controlled/operated by Chinese persons. It has come to notice that the said entities were doing their suspected/illegal business through various merchant IDs/accounts held with payment gateway/banks. The premises of Razorpay Pvt Ltd, Cashfree Payments, Paytm Payment Services Ltd, and entities controlled/operated by Chinese persons are covered in the search operation.” However, all three companies have denied the allegations made by ED.