Paytm says consumer data safe after founder’s personal data stolen

MUMBAI: Paytm said on Tuesday its consumer data was safe after police arrested three people, including the company’s spokeswoman, over allegations they tried to blackmail its founder and extort nearly $3 million by threatening to leak personal data.

The incident threatens to embarrass the company, synonymous with taking digital payments mainstream in the country after the government’s controversial currency note ban of late 2016, as well as its billionaire founder.

Paytm, whose investors include China’s Alibaba Group and Japan’s Softbank Group Corp, has declined to say how the stolen material would have allowed the blackmail of its founder, but added that only his personal data was taken.

“Paytm would like to reiterate that all our consumer data is protected with the highest and most impenetrable levels of security,” it said in a statement, declining further comment until the results of the police investigation are known.

Police said Sonia Dhawan, her husband Rupak Jain and another Paytm employee, Devendra Kumar, were arrested on Monday following a complaint on behalf of Vijay Shekhar Sharma, the founder of Paytm’s parent, One97 Communication.

“Police are investigating the nature of the stolen data and the modus operandi of the accused people,” police official Ajay Pal Sharma said on social network Twitter.

Dhawan is in police custody along with the other two, and could not be reached for comment on her mobile telephone. She did not respond to an email sent to her official address. A call to Jain went unanswered.

Sharma did not immediately respond to a request seeking comment. Other top company officials declined to comment.

The complaint said Sharma’s brother and son received two Whatsapp calls in September from one of the accused individuals demanding Rs 200 million ($2.7 million) to stop him from making the data public. “The person threatened us that if the money was not paid, he would severely damage our personal, professional and social lives,” Sharma’s brother, Ajay, said.

He transferred about Rs 200,000 this month to two bank accounts provided by the caller, he added. But the extortion demands did not end, forcing the family to go to the police, according to the complaint.

Paytm competes with Alphabet Inc’s Google Pay, and with 95 million monthly active users, it has been growing by 5 per cent to 6 per cent every month. It aims to reach 500 million users by 2022.