Chinese loan app case: ED freezes funds from Paytm, Easebuzz, Razorpay, Cashfree payment gateways

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The Enforcement Branch conducted search operations against Chinese-controlled lending applications. Searches were carried out at several premises of the accused in Delhi, Mumbai, Ghaziabad, Lucknow and Gaya, according to an official statement issued by ED on September 16.

The federal agency informed that a total of 16 premises of banks and payment gateways in Delhi, Pune, Gurugram, Mumbai, Chennai, Hyderabad, Jaipur, Jodhpur and Bengaluru regarding an investigation related to an app-based token named HPZ and related entities have also been covered.

During the interactions, the federal agency also froze funds worth 46.67 crores kept in Easebuzz, Razorpay, Cashfree and Paytm payment gateways. These funds have been frozen under the anti-money laundering law, according to the PTI news agency.

The amount was not found by ED during the search operation, but was voluntarily reported by Easebuzz to the investigative agency during interactions with the federal agency.

The federal agency also recovered various incriminating documents related to the Case of Chinese loan applications during the search operation carried out on 14 September. The case was registered by the Kohima Police Cybercrime Unit in Nagaland in October 2021.

“Huge balances were found to be maintained in the virtual accounts of entities involved with payment aggregators such as 33.36 crore was found with Easebuzz Private Limited, Pune, 8.21 crores with Razorpay Software Private Limited, Bangalore, 1.28 crore with Cashfree Payments India Private Limited, Bangalore and 1.11 crore with Paytm Payments Services Limited, New Delhi,” he added, as quoted by ANI news agency.

Earlier on September 3, the ED also carried out raids on the Bengaluru premises of these online payment gateways as part of an ongoing investigation into ‘illegal’ smartphone instant loans ‘monitored’ by Chinese people.

During the searches, she seized a quantity of 17 crore which were kept “in the merchant IDs and bank accounts of these entities controlled by Chinese persons”. The modus operandi of these entities is that they used fake Indian documents and made them bogus directors of the entities and generated proceeds of crime

The case is based on 18 FIRs registered by the Bengaluru Police Cybercrime Station against numerous entities/persons in relation to their involvement in extortion and harassment of people who had availed small loans through the managed mobile applications by entities/persons.

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