NEW DELHI: Fintech solutions provider One 97 Communications, which operates the popular payment platform Paytm, denied any links with the merchants that are currently under the enforcement agency's watch.
On Friday, the Enforcement Directorate (ED) carried out search operations at six premises in Bengaluru concerning an investigation relating to what it termed a Chinese loan app case. The raids were conducted under provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The premises of Razorpay, Cashfree Payments, Paytm Payment Services and entities "controlled" by Chinese persons were covered in the search operation, ED had said.
"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. It is hereby clarified that these merchants are independent entities, and none of them our group entities," Paytm clarified on Sunday through a regulatory filing to the stock exchanges.
"We are, and will continue to, fully cooperate with the authorities, and all the directive actions are being duly complied with," it added.
During the search operations, ED said it noticed that the entities raided were generating proceeds of crime through various merchant IDs and accounts held with payment gateways and banks and they were not operating from the addresses given on the Ministry of Corporate Affairs' website or registered addresses and having fake addresses.
"An amount of Rs 17 crore have been seized in merchant IDs and bank accounts of these Chinese persons-controlled entities," said the enforcement agency.
"The modus operandi of these entities is by using forged documents of Indians and making them as dummy directors of those entities, they are generating proceeds of crime," the ED said earlier.
It added that the ED had instructed Paytm to freeze certain amounts from the Merchant IDs (MIDs) of a specific set of merchant entities, to which it responded by saying "none of the funds" that were instructed to be frozen was of Paytm or any of their group companies.
"It may be further noted that none of the funds which have been instructed to be frozen belong to Paytm or any of our group companies," the filing added.