‘Foreign state actors stashed illicit funds in Paytm bank accounts’

Nearly three months after former Minister K. Ponmudy was convicted by the Madras High Court in a corruption case, the Tamil Nadu Legislative Assembly Secretariat has declared as vacant the Tirukkoyilur Assembly constituency, which was represented by him.

It also informed the Election Commission of India (EC) about the vacancy, an official source said.

AIADMK’s demand

Following his conviction, Mr. Ponmudy stood automatically disqualified from holding membership of the Assembly under the Representation of People Act. Last week, the AIADMK submitted a representation

to the Assembly Speaker, M. Appavu, urging him to declare that the Assembly seat had fallen vacant.

In December 2023, the Madras High Court convicted Mr. Ponmudy in a disproportionate assets case and sentenced him to three years’ imprisonment, reversing the acquittal granted to him in 2016 by a trial court.

“Extensive illegal activity” perpetrated by multiple businesses managed by “a syndicate of individuals connected to a foreign state” who cheated lakhs of Indians by offering “fraudulent services including prohibited gambling activities and dating services” was the trigger for the ₹5.49 crore fine imposed on Paytm Payments Bank Limited (PPBL) by the Financial Intelligence Unit (FIU) last week.

The matter first came to light over two years ago with the Cyber Crime Station of Hyderabad lodging FIRs under relevant sections of the Indian Penal Code and the Telangana State Gambling Act.

The FIRs flagged certain business entities and their network of businesses engaging in a number of illegal acts such as organising and assisting online gambling, routing the proceeds of such criminal activities through bank accounts they maintained with the payments bank.

The agency also listed out payoutrelated charges against the bank, which included its failure to put an internal mechanism in place to detect and report suspicious transactions in the manner prescribed under the Prevention of Money Laundering Act (PMLA) and PML rules.

The March 1 order against PPBL does not indicate which foreign state was involved.