The Enforcement Directorate has frozen more than Rs 68 crore worth of deposits after it raided a company and its related entities that ran mobile games and allegedly duped a number of people, including children, by extracting "unauthorised" payments from them and later transferred these to Singapore.
The federal probe agency said in a statement that it searched three premises of Coda Payments India Pvt Ltd (CPIPL) as part of a money laundering investigation and added the company has collected Rs 2,850 crore till date, out of which Rs 2,265 crore was remitted "outside" India after retaining certain percentage of revenue for payment of taxes and nominal profits here.
The ED said the company ran mobile games such as Garena Free Fire, Teen Patti Gold, Call of Duty and its money laundering case against the company was registered after taking cognisance of multiple police FIRs filed against the company and in some cases, the gaming portals too. "It is alleged that Coda Payments India Pvt. Ltd. which facilitates and collects payments from end users (mostly unsuspecting children) for games in the name of monetising and generating revenue for web/game publishers, was resorting to unauthorised deductions from the end-users of these games in the name of selling digital tokens which were used by the them (end users) to enhance their playing experience," the ED said.
Game developers like Garena and Coda Payments India Pvt Ltd have "intentionally" designed the payment mechanism in such a way that after the first successful transaction, a notification pops-up which seeks permission to make subsequent payments without any authentication, it alleged. "As the children are not aware of these technical terms, they just click on the notification in a routine manner and end up giving authorisation to make all future payments without any further authentication," the ED said, explaining the modus operandi of the alleged fraud.
It said Garena which publishes 'Free Fire' does "not have a company or presence in India and is operated from Singapore." "CPIPL was incorporated only to act as an agent of Coda Payments Singapore Pte. Ltd. for collecting money from the users and remitting it to the parent company."
"It has been collecting money in the name of sale of digital content and remitting it to its parent company in Singapore in the name of sale and purchase of digital content, however the entire operations of Codashop which sells the tokens are being managed by Coda Singapore only and there is no actual sale or purchase of digital content by CPIPL," the ED charged. It said the company was only a "conduit" to remit funds outside India."To prevent the company from alienating the proceeds of crime which it has collected through unauthorised deductions from the accounts of unsuspecting customers, all the bank accounts, merchant IDs in payment gateways and fixed deposits of CPIPL with balance as on date of Rs 68.53 crore have been froze under the Prevention of Money Laundering Act," the agency said.