Paytm Shares Fall Over 6% After ED Searches Company Offices
Paytm is the only listed company among the firms that were investigated by ED.
Shares of One 97 Communications Ltd., the operator of digital payments platform Paytm, declined after the Enforcement Directorate conducted searches at premises of several payment firms in Bengaluru.
Search operations under provisions of the Prevention of Money Laundering Act, 2002 were carried out on Sept. 2 at six premises in Bengaluru, in connection with Chinese loans app case, according to a press release by the investigative agency.
Several entities, operated by Chinese persons, are allegedly extorting and harassing people who had availed loans through mobile apps, according to ED. "The entities were doing their suspected/illegal business through various merchant IDs/accounts held with payment gateways/banks. The premises of Razorpay Pvt., Cashfree Payments, Paytm Payment Services Ltd. and entities controlled/operated by Chinese persons are covered in the search operation."
"An amount of Rs 17 crore have been seized in merchant IDs and bank accounts of these Chinese-person controlled entities," it said.
In response, Paytm said these merchants are independent entities, and are not related to the company. "ED has instructed us to freeze certain amounts from the merchant IDs of a specific set of merchant entities. None of the funds which have been instructed to be frozen belong to Paytm or any of our group companies," it said.
Paytm is the only listed company among the firms that were investigated over the weekend.
Shares of the Vijay Shekhar Sharma-led company declined as much as 6.3%, the most since July 26, to Rs 681 apiece. The stock closed 2.5% lower on Monday.
Of the 12 analysts tracking the company, six maintain a ‘buy’ and three each suggest a ‘hold’ and a ‘sell’, according to Bloomberg data. The 12-month consensus price target implies a 27.7% upside.
