The Enforcement Directorate (ED) has made a significant move in a major financial investigation, arresting Saumya Singh Rathore and Paavan Nanda, the founders of popular online gaming platform WinZO. The arrests were made on Wednesday on charges of money laundering, following extensive searches across multiple cities and the freezing of assets valued at over Rs 523 crore.
The Arrest and Court Proceedings
According to official sources, both directors of Winzo Games Pvt Ltd were taken into custody. "Saumya and Paavan... were arrested yesterday, and they were produced before the home office of the Hon'ble judge," a source revealed. The court has granted the federal agency custody of the individuals and has scheduled a detailed hearing on the remand application for 11:30 am today.
This legal action comes just days after the ED conducted coordinated searches at premises in Bengaluru, Gurgaon, and Delhi, signaling an intensification of the probe.
Massive Assets Frozen in the Probe
On Monday, the ED released an official statement detailing the scale of the alleged proceeds of crime. The agency stated that WinZO Games Pvt. Ltd., which operates real money gaming services through its app, had proceeds of crime worth approximately Rs 505 crore frozen. These assets were seized under the Prevention of Money-Laundering Act (PMLA), 2002 and included a diverse portfolio of bank balances, bonds, fixed deposits (FDRs), and mutual funds.
Origin of the Investigation and Allegations
The ED's investigation was initiated based on multiple First Information Reports (FIRs) filed against WinZO and other associated entities. The complaints alleged a range of serious offences, including cheating, arbitrary account blocking, impersonation, and misuse of PAN cards.
An ED spokesperson elaborated on the allegations, stating, "It is also alleged in the FIRs that the complainants' KYC was misused by WinZO and others, and the complainants have suffered substantial loss due to fraudulent activities and cheating by WinZO and others."
Further deepening the case, the ED's probe uncovered that the company was operating real money games in foreign territories, including Brazil, the USA, and Germany, from its base in India, using the same platform as its Indian entity. In a serious revelation, the spokesperson added that even after the central government's ban on real money games, an amount of Rs 43 crore was still held by the company without being refunded to the gamers and customers.
The agency also claims to have evidence of unscrupulous practices where customers were made to play against algorithms or software without their knowledge, believing they were competing with human players in real money games.
In response to the earlier searches, WinZO had issued a statement maintaining its compliance with "all applicable laws" and affirming its cooperation with the investigating authorities. The recent arrests, however, mark a dramatic escalation in this high-profile financial crime case that has sent ripples through India's burgeoning online gaming industry.
