Fino Payments Bank CEO Arrested in Major GST Evasion Probe Linked to Online Betting
The Directorate General of GST Intelligence (DGGI), Hyderabad unit, executed a significant arrest on Friday, taking into custody Rishi Gupta, the Managing Director and Chief Executive Officer of Fino Payments Bank. This action is part of an ongoing investigation into an alleged GST evasion case connected to online betting operations.
Early Morning Arrest and Medical Incident
Gupta was apprehended in Mumbai at 3:55 AM under various sections of the Central GST and State GST Acts. Following his arrest, he was transferred to JJ Hospital after complaining of chest pain. DGGI officials are currently awaiting medical clearance to present him before the jurisdictional court for legal proceedings.
Massive Financial Transactions Under Scrutiny
Investigators suspect that approximately Rs 3,000 crore linked to betting app transactions were routed through banking channels. The broader online betting network being examined is estimated to involve transactions worth about Rs 13,000 crore, indicating the scale of the alleged financial irregularities.
The probe focuses on allegations that funds generated through betting applications were moved through a complex network of entities. Key companies identified in this network include:
- Wegofin Digital Solutions Private Ltd
- PSRao Digital Solutions Private Ltd
Expanding List of Accused Individuals
Authorities have identified certain directors of these firms among the accused. Specifically, the investigation has named Vennapusa Rajasekhar Reddy and YS Prabhu Kumar, directors of Wego Fin, as individuals involved in the case. This arrest follows the earlier detention of Pankaj of Adsum, described as a third-party verification entity connected to the network.
Bank's Official Response and Operational Continuity
In a disclosure to stock exchanges under SEBI regulations, Fino Payments Bank clarified that the arrest pertains to certain business partners and not to the bank's GST compliance. The bank emphasized that none of its officials is implicated and that it is cooperating fully with authorities.
The bank stated there is currently no material impact on operations and committed to disclosing any significant developments. Following the arrest, the bank convened a special board meeting and appointed Chief Financial Officer Ketan Merchant to oversee day-to-day operations in Gupta's absence until further resolution or his return.
Broader Implications for Financial Regulation
This case highlights increasing regulatory scrutiny of digital payment channels and their potential misuse in illegal activities. The DGGI's actions demonstrate a concerted effort to address GST evasion in emerging digital sectors, particularly those involving high-value transactions through banking systems.
The investigation continues to develop as authorities examine the complex web of financial movements and corporate relationships involved in the alleged betting network. Further updates are expected as medical and legal procedures progress for the detained CEO.
