Paytm stock drops 3% after the Directorate of Law Enforcement raids its offices

  • On Friday, the Directorate of Execution (ED) searched the premises of Payment gateways like Razorpay, Cashfree and Payment.
  • The searches were carried out at six premises in Karnatakathe capital and the investigation is still ongoing.
  • The premises of Razorpay, Cashfree Payments, PayTM payment services and entities controlled/operated by Chinese are covered by the search operation.

Shares of One 97 Communications, PayTM, fell more than 3% in early trading after its premises were raided by the Enforcement Directorate (ED) last week.

The searches were conducted at six premises belonging to Razorpay, Cashfree Payments, Paytm Payment Services and Chinese controlled/operated entities in Bangalore and the investigation is still ongoing.

Paytm was the only listed entity, in the latest research, and its stock fell from ₹17 at the start of trading to ₹710.

The company released a statement indicating that the research by ED was conducted on a “specific set of merchants”.

“We support law enforcement, which investigates a specific set of traders. The authorities asked us to provide certain information about these traders under surveillance, to which we quickly responded. We continue to cooperate with authorities and remain fully compliant,” the Paytm spokesperson said.

Paytm also clarified that none of the funds frozen by the Enforcement Department (ED) belong to it or any of its group companies.

ED said the case involved numerous entities/persons in connection with their involvement in extortion and harassment of the public who had benefited from small amounts of loans through the mobile applications operated by these entities/persons.

“These entities are controlled/operated by Chinese people. The modus operandi of these entities is to use fake Indian documents and make them bogus directors of these entities, they generate proceeds of crime. Said entities were found to be doing their suspicious/illegal activities through various IDs/merchant accounts held with payment gateways/banks,” ED said in a press release.

The premises of Razorpay, Cashfree Payments, Paytm Payment Services and entities controlled/operated by Chinese persons are covered by the search operation.

A few reports suggest that the ED launched an investigation after a number of cases of gullible debtors ended their lives with police saying they were coerced and harassed by these lending app (app) companies . These companies are accused of having obtained all the personal data of the loan taker when downloading the application and then misusing it.

During the search operation, it is found that the said entities were generating proceeds of crime through various fake merchant accounts. In addition, an amount of ₹17 crore was seized from the merchant IDs and bank accounts of these Chinese-controlled entities.


Cyrus Mistry and his co-passenger killed in a car accident without wearing a seatbelt; speeding, error in judgment caused accident: police

India’s $620bn external debt is sustainable: Finance Ministry report


About Author

Comments are closed.