BENGALURU: The Directorate of Enforcement (ED) has carried out search operations at five premises of online payment gateways in Bengaluru over alleged irregularities in instant app-based loans, allegedly controlled by some Chinese persons and entities. During the searches, the ED seized Rs 78 crore in merchant IDs and bank accounts of these entities under the provisions of the Prevention of Money Laundering Act (PMLA), the Central agency said in an official release on Friday. “The premises of Razorpay Pvt Ltd and the bank’s compliance offices related to these entities were covered in the search operation, the ED added.
The ED searches on October 19 were based on the 18 FIRs registered by the Cyber Crime police station, Bengaluru City, against numerous entities/persons for their alleged involvement in extortion and harassment of people, who had availed petty loans through mobile apps run by the accused.
“During investigation, it has emerged that these entities are controlled/operated by Chinese nationals. The modus operandi of these entities includes using of forged documents of some vulnerable Indians, making them their dummy directors and generating proceeds of crime,” the ED stated. “It has come to notice (of the ED) that the said entities were doing suspected illegal business through various merchant IDs/accounts held with payment gateways/banks. Based on the investigation conducted and inputs received from the Central Crime Branch (CCB), Bengaluru city, the search operations were carried out,” the Central agency added. “During the searches, it was noticed that the entities were generating proceeds of crime through various merchant IDs/accounts held with payment gateways/banks and have submitted fake addresses in KYC documents,” the ED stated.
The agency seized Rs 78 crore in merchant IDs and bank accounts of these Chinese persons-controlled entities. The total seizure in this case is Rs 95 crore, added the agency.
‘Blocked suspicious entities’
RazorPay, in response to the ED searches, said that “as part of the ongoing investigation against a few suspicious entities, who conducted illegal business through multiple payment gateways/banks, we have proactively blocked all those suspicious entities and funds associated with them about one-and-a-half-years ago, and we have shared their details with ED multiple times”.
The RazorPay spokesperson added that “being a regulated financial institution, we routinely cooperate with law enforcement agencies and provide necessary merchant information to assist in the investigation process. No funds of Razorpay were frozen as part of these visits. We would like to reiterate that all our operations and onboarding processes adhere to the highest standards of governance & regulatory guidelines.”