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No link to Chinese loan merchants under agency scanner: Paytm

NEW DELHI: Fintech solutions provider One 97 Communications, which operates popular payment platform Paytm, has denied any links to the merchants who are currently under the watchful eye of the enforcement agency.

The Enforcement Directorate (ED) carried out searches on six premises in Bangalore on Friday in relation to an investigation into what it called a Chinese loan enforcement case. The raids were carried out under the provisions of the Prevention of Money Laundering Act 2002 (PMLA).

The premises of Razorpay, Cashfree Payments, Paytm Payment Services and Chinese-controlled entities were targeted by the raid, ED said.

“As part of ongoing investigations of a specific set of merchants, ED has sought information on those merchants to whom we provide payment processing solutions. It is hereby clarified that these merchants are independent entities, and that none of them belong to our group entities,” Paytm clarified on Sunday via a regulatory filing with the exchanges.

“We are cooperating and will continue to cooperate fully with the authorities, and all actions of the directive are duly complied with,” he added.

During the search operations, ED said it noticed that the raided entities were generating proceeds of crime through various merchant IDs and accounts held with payment gateways and banks and that they were not operating from the addresses given. on the Ministry of Corporate Affairs website or registered addresses. and have fake addresses.

“An amount of Rs 17 crore has been seized from the merchant IDs and bank accounts of these Chinese-controlled entities,” the law enforcement agency said.

“The modus operandi of these entities is to use fake Indian documents and make them bogus directors of these entities, they generate proceeds of crime,” the ED said earlier.

He added that the ED had asked Paytm to freeze certain Merchant Identifier (MID) amounts of a specific set of merchant entities, to which he responded by saying “none of the funds” that were to be frozen were from Paytm or any other of their group companies.

“It should further be noted that none of the funds ordered to be frozen belong to Paytm or any of our group companies,” the filing adds.