The ED has been rigorously probing the Chinese loan apps case, where several payment gateways such as Razorpay and Paytm came under scrutiny.
The Enforcement Directorate (ED) on Saturday announced that it has expanded its probe in the Chinese loan apps case and raided multiple locations linked to payment gateway companies such as Razorpay, Paytm, and Cashfree in Bengaluru, Karnataka.
The locations of these popular payment-linked websites and applications as the ED alleged irregularities in instant app-based loans "controlled" by Chinese persons. The searches that started Friday as part of an ongoing probe are still underway, the agency said on Saturday.
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".
What is the Chinese app loan case?
ED has been targeting several payment gateway companies ever since the Covid-19 pandemic hit the country, forcing many citizens to seek loans through online mobile apps due to crippling financial problems.
After several cases of gullible debtors ending their lives over non-payment of loans, 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 ED initiated a probe under the criminal sections of the Prevention of Money Laundering Act (PMLA) after the police alleged that many of the debtors were being harassed by these loan app companies by using their personal data to threaten them.
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,” officials said.
Why were Paytm, and Razorpay offices raided by ED?
The Enforcement Directorate (ED) had raided the offices of multiple payment gateways on the basis of 18 FIRs filed across the country in relation to such cases. It further said that the "premises of Razorpay Pvt Ltd, Cashfree Payments, Paytm Payment Services Ltd and entities controlled/operated by Chinese persons are covered in the search operation".
The entities under investigation were generating proceeds of crime through various merchant IDs/accounts held with payment gateways/banks and they are also not operating from the addresses given on the MCA (ministry of corporate affairs) website/registered address, the agency said.
Though Paytm has not issued an official statement regarding the raids yet, Razorpay and Cashfree have said that they are proving their full cooperation to the central agency with the raids.
(With PTI inputs)
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 "DNA Explainer: What is the Chinese loan app probe? Know why Paytm, Razorpay are under ED scanner")
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