By Reuters, September 3, 2022
NEW DELHI, Sept 3 (Reuters) – India’s federal financial crime-fighting agency said on Saturday it was searching the premises of online payment companies as part of an investigation of Chinese-controlled firms and individuals suspected of illicit lending practices.
The payment companies included Razorpay Pvt Ltd, Cashfree Payments and Paytm Payment Services Ltd, the Enforcement Directorate said in a statement.
“The premises of Razorpay Pvt Ltd, Cashfree Payments, Paytm Payment Services Ltd and entities controlled or operated by Chinese persons are covered in the search operation,” it said.
The searches are part of a probe involving a Chinese loan app where there were allegations of extortion and harassment of customers who had taken out small loans, it added.
Chinese controlled entities and individuals were accused by the Directorate of faking the identity of Indian company directors to launder the proceeds of crime.
The agency seized 170 million Indian rupees ($2.13 million)in merchant IDs and bank accounts of entities controlled by Chinese persons.
The Directorate did not name the companies or individuals that it seized the funds from.
The transactions have been conducted via various merchant accounts held with payment gateways and banks, it added.
Paytm’s parent is One 97 Communications Ltd.
The searches were being conducted in India’s tech city Bengaluru.
“Some of our merchants were being investigated by law enforcement about a year and a half back. As part of the ongoing investigation, the authorities requested additional information to help with the investigation,” a Razorpay spokesperson said in a statement to Reuters.
Razorpay said it has shared other details with the authorities.
Paytm said law enforcement agencies are investigating a specific set of merchants and they reached out to the company to provide certain information about these merchants under scrutiny.
“We continue to cooperate with the authorities and remain fully compliant,” it added.
Cashfree did not respond to Reuters requests for comments.
($1 = 79.7170 Indian rupees)