ED conducting searches on certain Paytm, PayU premises: Sources

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The Enforcement Directorate is conducting searches at certain premises of payment aggregators Paytm and PayU, CNBC TV-18 reported on September 14, citing sources.

The ED action comes less than two weeks after it had searched the Bengaluru premises of Paytm, along with rival fintech firms Razorpay and Cashfree Payments, in connection with investigations pertaining to the Chinese loan apps.

The federal anti-money laundering agency is currently also conducting searches on Chinese companies facilitators in Mumbai, Delhi, Gurgaon, Lucknow and Kolkata, the persons privy to the development told CNBC TV-18.

The searches being conducted by the ED also include payment gateway companies for specific transactions, they added.

After the news was reported, a PayU spokesperson said the company runs its businesses in a compliant manner and in accordance with applicable laws. "It is our policy not to comment on matters that relate to any legal or regulatory matters. We urge that any speculation in this regard be avoided by the media," the spokesperson said, adding that "we follow all norms applicable to us and cooperate with all regulatory and investigating authorities.

Paytm, in a statement issued on September 3, following the ED searches at the Bengaluru premises a day earlier, had clarified that the agency only sought information regarding merchants to whom the company provides payment processing solutions.

"We wish to clarify that these merchants are independent entities, and none of them are our group entities," Paytm had said.

The ED had, in a statement issued following the searches conducted earlier this month, said its probe has revealed that nefarious loan apps owned by Chinese individuals were conducting business through various merchant IDs or accounts held with payment gateways and banks.

A total of Rs 17 crore had been seized in merchant IDs and bank accounts of these Chinese persons-controlled entities and further search operations are underway, the agency had said in a statement issued on September 3.

The case is based on 18 FIRs registered by Bengaluru's Cyber Crime Police Station against numerous entities/persons in connection with their involvement in extortion and harassment of the public who had availed small amount of loans through the mobile apps, ED had said.