India’s financial crime-fighting agency on Tuesday searched the premises of fintech firm and C Ltd. in Free Fire as part of a money laundering probe into Koda Payments India.
The Enforcement Directorate (ED) said it has started investigating the companies following complaints that the platform has made unauthorized deductions from the accounts of online game users.
ED has conducted searches at 3 premises belonging to M/s Koda Payments India Pvt Ltd in connection with the ongoing investigation under PMLA, 2002 against M/s Koda Payments India Pvt Ltd. Ltd. and ‘Garena Free Fire’ mobile game and frozen bank account of Rs. 68.53 crores.
— ed (@dir_ed) September 27, 2022
Coda enables cross-border payments for games and other digital products, including Garena Free Fire, Teen Patti Gold and Call of Duty. The ED also sealed all accounts of Koda, in which a total of Rs. 685.3 million.
Coda Payments&C did not immediately respond to an email seeking comment.
Earlier this year, Reuters reported, citing four sources, that Singapore had raised concerns with India about banning the popular gaming app Free Fire, which was owned by technology group C, after the move. In the first sign of diplomatic interference after scaring investors.
Following the ban, the market value of the New York-listed Southeast Asian firm fell by $16 billion (about Rs 1,30,400 crore) in a single day, and investors were reportedly worried that India might extend it to C’s e-commerce app. There is Shopee, which was recently launched in the country at that time.
Sources, which included two Indian government officials, had said Singapore had asked Indian officials why the app was targeted in a massive crackdown on the Chinese app, even though Si is headquartered in the wealthy city state.
Singapore was asked whether the app was “inadvertently banned,” one of the Indian officials aware of the diplomatic initiative told Reuters.
Concerns raised with India’s foreign ministry were referred to the Department of Information Technology (IT), which ordered the ban, two Indian sources told Reuters at the time.
Garena Free Fire was one of the 54 apps that were banned by the government for being linked to China because they allegedly posed a security threat to the country. The apps that were banned include Garena Free Fire, Tencent’s Xriver and NetEase’s Onmyoji Arena. So far, the government has blocked around 300 apps in the country since the border tension with China escalated in May 2020.
© Thomson Reuters 2022
