ED tightening its grip on Chinese companies, fresh raids in money laundering case

The Enforcement Directorate (ED) is tightening its grip on Chinese companies doing business in India. On Wednesday, the ED conducted fresh raids against some payment service platforms (gateways) and other companies in connection with money laundering. Official sources said, this action has been taken in a money laundering case related to alleged financial irregularities on the part of companies giving instant loans through apps controlled by Chinese individuals.

According to sources, the premises of some payment gateway operators and some companies engaged in loan app transactions and operators in about three states are being searched. A Paytm spokesperson said the action pertains to the same case in which the agency conducted searches earlier this month.

On September 2, several companies were raided

Paytm said, “As we have mentioned earlier that ED is seeking information from several payment service providers about certain merchants and we have shared the required information.” As part of this investigation, the federal agency on September 2 raided the premises of payment gateways like Paytm, Razorpay and Cashfree in Bengaluru. During that raid, money worth Rs 17 crore held in bank accounts and ‘merchant’ IDs of entities controlled by Chinese individuals was seized.

The issue was raised in the meeting of Reserve Bank officials

Union Finance Minister Nirmala Sitharaman had also discussed various issues related to the illegal loan app in the meeting of the ministry and the Reserve Bank officials held on September 8. In this meeting, it was decided to take several measures to check the operation of such apps. It is worth noting that these payment gateway companies have been on the target of ED action since the year 2020 after the Kovid-19 epidemic in the country.

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