Shares of Paytm’s parent firm, One97 Communications, tanked as much as 6.37 per cent on Monday to hit an intraday low of Rs 681.20 against its previous close of Rs 727.55. Taking the intraday low value into consideration, the stock has dived more than 68 per cent from its issue price of Rs 2,150.
As of 11:27 am, Paytm was down 2.49 per cent to trade at Rs 709.45 on BSE. On NSE, the stock was trading 2.57 per cent lower at Rs 708.50.
The market capitalisation (m-cap) of Paytm fell to Rs 46,034.50 crore on BSE. Paytm shares made a weak debut at the exchanges in November last year.
The Enforcement Directorate (ED) has conducted raids at six premises of online payment gateways, including Paytm, in Bengaluru, over the alleged irregularities in instant app-based loans “controlled” by Chinese persons.
The agency has also said that during the raids, it seized Rs 17 crore worth of funds kept in “merchant IDs and bank accounts of these Chinese persons-controlled entities”.
The digital financial services firm, in response, denied any link with the merchants that are under the central probe agency scanner.
“It may be noted that ED has instructed us to freeze certain amounts from the Merchant IDs (MIDs) of a specific set of merchant entities (as mentioned by the ED in their press release). It may be further noted that none of the funds, which have been instructed to be frozen belongs to Paytm or any of our group companies,” Paytm said in an exchange filing.
Background
The probe agency initiated a probe under the criminal sections of the Prevention of Money Laundering Act (PMLA) after several instances of gullible debtors ending their lives came to the fore from various states, with the police stating they were being coerced and harassed by these loan app (application) companies by publicising their details available in their phones and by undertaking high-handed methods to threaten them.
It was alleged that the companies sourced all personal data of the loan-taker at the time downloading of these apps on their phones, even as their interest rates were “usurious”.
The ED stated the alleged proceeds of crime in the case were routed through these payment gateways.
Talking about the instant case, the agency said the “modus operandi” of these entities was that they use forged documents of Indians and made them dummy directors leading to the generation of “proceeds of crime”.
“These entities are controlled/operated by Chinese persons. It has come to notice that the said entities were doing their suspected/illegal business through various merchant IDs/accounts held with payment gateways/banks,” the ED said.
Paytm, however, said that it is fully cooperating with the authorities, and all the directive actions are being duly complied with.
(With inputs from PTI)
