ED searches some Paytm, PayU offices related to transactions with Chinese shell companies

In a fresh round of probe, the Enforcement Directorate (ED) searched some premises of payment gateway companies such as Paytm and PayU in connection with the transactions with Chinese shell companies. These premised were located in Mumbai, Delhi, Gurgaon, Kolkata and Lucknow.

The federal agency had begun the searches on Friday in connection with "illegal" Chinese loan app case. On Saturday, the ED raided the premises of Razorpay, Paytm and Cashfree in Bengaluru in connection with a case linked to "illegal" instant smartphone-based loans "controlled" by Chinese persons.

During the raids, the probe agency seized Rs 17 crore worth funds kept in "merchant IDs and bank accounts of these Chinese persons-controlled entities", an official statement said.

Paytm spokesperson said, "As we have mentioned before, ED continues to seek information about certain merchants from various payment service providers, we have shared the required information."

The Chinese loan apps case is based on 18 FIRs registered by the Cyber Crime Police Station in Bengaluru City against numerous entities/persons in connection with their involvement in extortion and harassment of the public who had availed small amount of loans through the mobile apps being run by those entities/persons, the ED said earlier.

During the investigation, it was revealed that the entities are controlled/operated by Chinese Persons.

"The modus operandi of these entities is by using forged documents of Indians and making them as dummy directors of those entities, they are generating proceeds of crime," the statement read.

Moreover, the agency noticed that the said entities were doing their suspected or illegal business through various Merchant IDs/Accounts held with Payment Gateways/banks.

“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 have been seized in merchant IDs and bank accounts of these Chinese persons-controlled entities,” the federal agency said.