Paytm Denies Links With Merchants Under ED Scanner in Chinese Loan App Case

Paytm's parent entity One 97 Communication on Sunday denied any connection with the merchants that are currently under the scanner of the Enforcement Directorate's (ED) in its probe in connection with a Chinese loan app. In a statement, the fintech company said that none of the funds frozen by the central agency belongs to it or any of its group firms. The ED late last week, carried out search operations at premises of online payment entities including Paytm, Razorpay, and Cashfree.

"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. We wish to clarify that these merchants are independent entities, and none of them are our group entities" Paytm said in an regulatory filing on Sunday.

The digital payments firm said none of the merchant IDs instructed to be frozen by the ED belonged to Paytm or any of its group entities.

"We are, and will continue to, fully cooperate with the authorities, and all the directive actions are being duly complied with," it added.

The ED on Saturday said it had conducted raids at six premises of online payment gateways including Paytm, Razorpay, and Cashfree in Bengaluru as part of an investigation of Chinese-controlled firms and individuals suspected of illegal lending practices.

As per a report by PTI, the ED had seized Rs. 17 crore worth of funds kept in certain merchant IDs and bank accounts that belonged to Chinese citizens. The raids were conducted under provisions of the Prevention of Money Laundering Act (PMLA), 2002.

Paytm's parent One97 Communications is backed by China's Alibaba Group Holding and its affiliate Ant Group.