Paytm Shares Fell 4% In Early Trade Following ED Raid Over Connection With Chinese Loan Merchants

A day after the ED raided Paytm's offices, the company's shares dropped 4% in the early hours of trade on Monday.

On Sunday, One97 Communications, a provider of digital financial services and owner of the Paytm brand, denied any affiliation with the businesses being investigated by the Enforcement Directorate (ED) in connection with the Chinese loan app issue.

None of the money that the Enforcement Directorate had frozen belonged to Paytm or any of the companies in its group, the company said.

"As a part of ongoing investigations on a specific set of merchants, the ED has sought information regarding such merchants to whom we provide payment processing solutions. We wish to clarify that these merchants are independent entities, and none of them are our group entities. We are, and will continue to, fully cooperate with the authorities, and all the directive actions are being duly compliedwith," Paytm said in a regulatory filing.

On Saturday, the ED said that it had conducted searches at six online payment gateway locations in Bengaluru, such as Paytm, Razorpay, and Cashfree, in response to allegations of irregularities in fast app-based loans "managed" by Chinese individuals.

According to the agency, the searches that began on Friday as part of the continuing investigation are still in progress.