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BNPL firm Simpl under ED lens for Rs 913 Cr FDI violations

EntrackrEntrackr · 5m ago
BNPL firm Simpl under ED lens for Rs 913 Cr FDI violations
Medial

The Enforcement Directorate (ED) has filed a formal complaint under the Foreign Exchange Management Act (FEMA) against One Sigma Technologies Pvt Ltd, which operates the buy-now-pay-later (BNPL) app Simpl, for alleged contraventions amounting to Rs 913.76 crore. According to the ED’s Bengaluru Zonal Office, the investigation was triggered by credible information suggesting that Simpl received substantial foreign investment from the United States in violation of India’s FDI regulations. According to the press release, it has received Rs 648.87 crore in Foreign Direct Investment and raised an additional Rs 264.88 crore via convertible notes, treating both investments under the 100% automatic route. The company classified its business activity as “Information Technology and computer service activities” to qualify for the automatic FDI route. Simpl last raised $40 million in its Series B round in November 2021. However, the ED’s investigation found that Simpl’s core operations fall under the “financial activities” category, and according to the rules, the FDI into financial services is subject to the government approval process, not the automatic route. Additionally, according to Indian FDI rules, startups offering financial services must obtain government approval before issuing convertible notes to foreign investors. But according to the ED, Simpl did not get this required approval from the Government of India. With this, SIMPL allegedly violated FEMA provisions related to both FDI and convertible note issuance. The total contravention has been pegged at Rs 913.76 crore. The complaint against the company and its director, Nithya Nand Sharm, has now been submitted to the adjudicating authority, which will decide on penalties or further legal action under Section 13 of FEMA. This move highlights the importance of following FDI rules in India’s fintech sector, especially for BNPL and lending apps that mix technology with loosely regulated financial services.

RBI, ED likely to turn up heat on mobile payment users violating Fema rules

Economic TimesEconomic Times · 1y ago
RBI, ED likely to turn up heat on mobile payment users violating Fema rules
Medial

The Reserve Bank of India (RBI) and investigating agencies are planning to intensify their actions against individuals and companies violating Foreign Exchange Management Act (FEMA) and other norms on various mobile payment platforms. The agencies seek assistance from the central bank to identify potential violators. This move comes after RBI shared information on possible violations with the Directorate of Enforcement (ED). The ED is expected to request the central bank for updated information on violators related to Paytm Payments Bank. Joint efforts will be made by the ED, Financial Intelligence Unit, and Income Tax Department to investigate money laundering and impose penalties.

ED freezes Rs 192 Cr linked to WinZO subsidiary in money laundering probe

EntrackrEntrackr · 10d ago
ED freezes Rs 192 Cr linked to WinZO subsidiary in money laundering probe
Medial

News All Stories ED freezes Rs 192 Cr linked to WinZO subsidiary in money laundering probe Last month, ED arrested WinZO co-founders Paavan Nanda and Saumya Singh Rathore after search and seizure operations at company premises and residences. Shashank Pathak 01 Jan 2026 20:46 IST Follow Us The Directorate of Enforcement has frozen assets worth around Rs 192 crore classified as Proceeds of Crime (POC) belonging to Zo Games Pvt Ltd, a wholly owned Indian subsidiary of WinZO Pvt Ltd, after conducting a search operation under the Prevention of Money Laundering Act. The assets were frozen in the form of bank balances, fixed deposits, and mutual funds, the ED said in a press release. The agency stated that evidence pointed to deceptive gaming practices on the WinZO platform, where users were made to play real money games against bots and algorithm-driven personas without disclosure. The probe also found that withdrawals of user funds were restricted or prevented in certain cases. So far, the ED has identified total Proceeds of Crime of around Rs 802 crore in the case. Earlier, in November 2025, the ED arrested WinZO co-founders Paavan Nanda and Saumya Singh Rathore after search and seizure operations at company premises and residences. These actions followed the freeze of assets worth over Rs 505 crore under the PMLA. The assets included bank balances, fixed deposits, mutual funds, and other financial instruments linked to the company and its related entities. The investigation is based on multiple FIRs and hundreds of user complaints that allege manipulation of gameplay, misuse of customer data, non-refund of user funds, and continuation of real money gaming activities despite regulatory restrictions. Investigators said user funds remained with the platform even after restrictions on real money gaming came into force. The ED has also flagged overseas fund movements, with part of the alleged Proceeds of Crime routed to the US and Singapore as overseas investments. Funds worth $54 million were found parked in a US bank account held by WINZO US Inc. The WinZO case forms part of a wider enforcement phase in 2025. During the year, the ED initiated action against startup-origin companies such as Dream11, Gameskraft, Probo, Paytm, Myntra, Simpl, and OctaFX under money laundering, FEMA, and foreign-exchange related probes.

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