India’s agency against money laundering said on Saturday it had searched the premises of online payment companies including Razorpay Pvt Ltd, Cashfree Payments and Paytm Payment Services Ltd.
The search operations, conducted in tech hub Bengaluru on Friday, were a part of a probe involving a Chinese loan app case where there were allegations of extortion and harassment of customers, according to a statement from the investigation agency.
“During inquiries, it has emerged that these entities are controlled/operated by Chinese persons,” it said.
They allegedly forged documents of Indians, making them “dummy directors” of the companies that were generating proceeds of crime through merchant accounts held with payment gateways and banks, the investigating agency said, adding it has seized 170 million rupees (US$2.13 million).
The latest move underlines heightened scrutiny of Chinese companies, following a Himalayan border clash between the neighbors in 2020 that left 20 Indian and four Chinese soldiers dead.
Razorpay said some of its merchants were investigated by law enforcement about 18 months ago.
“As part of the ongoing investigation, the authorities requested additional information to help with the investigation,” the company said. “We have fully cooperated and shared KYC [know-your-customer] and other details. The authorities were satisfied by our due diligence process.”
A Paytm spokesperson said they are cooperating with authorities, who are investigating a specific set of merchants.
“The authorities reached out to us with directions to provide certain information about these merchants under scrutiny, to which we promptly responded,” the person said.
A report by India’s central bank last year said it had found about 600 illegal loan apps operating in the local market.
Authorities have cracked down on the online money-lending operations, and the raids came a day after the Reserve Bank of India issued new operating guidelines for the industry.
Police in New Delhi last month arrested 22 people for allegedly urging people to take money on the pretext of giving loans, local media reported.
Additional reporting by AFP
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