Digital financial services firm One97 Communications, which operates under the Paytm brand, on Sunday denied any link with the merchants that are under the Enforcement Directorate scanner in the Chinese loan app case.
Paytm said that none of the funds frozen by the Enforcement
Directorate (ED) belongs to it or any of its group firms.
"As a part of ongoing investigations on a specific set
of merchants, the ED has sought information regarding such merchants to whom we
provide payment processing solutions. We wish to clarify that these merchants
are independent entities, and none of them are our group entities," Paytm
said in a regulatory filing.
The ED on Saturday said it has conducted raids at six
premises of online payment gateways, such as Razorpay, Paytm and Cashfree in
Bengaluru, over the alleged irregularities in instant app-based loans
"controlled" by Chinese persons.
The searches that started on Friday as part of an ongoing
probe are still underway, the agency said.
The federal probe agency also said that during the raids, it
seized Rs 17 crore worth of funds kept in "merchant IDs and bank accounts
of these Chinese persons-controlled entities".
"It may be noted that ED has instructed us to freeze
certain amounts from the Merchant IDs (MIDs) of a specific set of merchant
entities (as mentioned by the ED in their press release). It may be further
noted that none of the funds, which have been instructed to be frozen belongs
to Paytm or any of our group companies," Paytm said.
The ED initiated a probe under the criminal sections of the
Prevention of Money Laundering Act (PMLA) after a number of instances of
gullible debtors ending their lives came to the fore from various states, with
the police stating they were being coerced and harassed by these loan app
(application) companies by publicising their personal details available in
their phones and by undertaking high-handed methods to threaten them.
It was alleged that the companies sourced all personal data
of the loan-taker at the time downloading of these apps on their phones, even
as their interest rates were "usurious".
The agency had said the alleged proceeds of crime in the
case were routed through these payment gateways.
Talking about the instant case, the ED said the "modus
operandi" of these entities was that they use forged documents of Indians
and made them dummy directors leading to the generation of "proceeds of
crime".
"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 gateways/banks," the ED had said.
Paytm said that it is fully cooperating with the
authorities, and all the directive actions are being duly complied with.