Editor’s note: A previous version of this article stated that ED conducted a search operation across 10 locations in Nium’s offices in Mumbai, Chennai and Kochi. Only Nium’s Mumbai office was involved in the operation. This article has been updated accordingly.
Singapore-based fintech firm Nium has suspended cash collection in its India entity, which local regulators allege was used for money laundering, shared a Nium spokesperson.
The payments unicorn was last week reported to be under investigation by India’s Enforcement Directorate (ED) after officials found Nium India Private Limited to be a “collection agent” for monies raised by shell companies using fake invoices in the name of payment for technical services.
“While the ED investigation is ongoing, we have taken the additional step to suspend our INR [Indian Rupee] collection business in India,” wrote a Nium spokesperson in an email to DealStreetAsia.
Nium further clarified that this Indian entity is not related to Wirecard India Forex Private Limited—a company it acquired after the unravelling of scam-hit UK fintech Wirecard over two years ago.
“Nium has been actively cooperating with India’s Enforcement Directorate (ED) on an investigation into certain transactions facilitated through our subsidiary, Nium India Pvt. Ltd., by alleged bad actors in India. We take allegations of misuse of our platform very seriously and are taking all necessary actions to identify and prevent any instances of such activity,” said Nium.
According to the ED, which comes under India’s finance ministry, the funds were collected through various bank accounts in the southern Indian state of Kerala using payment aggregators.
These were then channelled through multiple shell companies in Chennai, Bangalore, Delhi, Mumbai and others before they were remitted out of India against cryptocurrencies, fake imports of software from Singapore, and forex currency purchases.
Some $14.9 million of cash parked in Singapore shell entities and on behalf of NIUM India Private Limited’s bank accounts have been frozen, the ED said in a statement dated February 28.
The investigation was initiated after the Kerala Police received complaints against exploitation and cheating through online platforms. This triggered a search operation across 10 locations across Mumbai, Chennai and Kochi including Nium’s Mumbai office on February 23 and February 24. Several devices, documents, bank accounts and assets were seized and recovered during the search operation.
The ED investigation is limited to the INR collection business of Nium India Private Limited, which is not a regulated entity, stated Nium.
“We continue to fulfil our regulatory obligations in all the countries we operate and are confident that this investigation will yield that Nium India Private Limited has fully complied with applicable requirements under its collection agent arrangement with its India bank partner,” added Nium.
Nium, which is backed by the likes of Temasek Holdings, Vertex Ventures, GIC and GSR Ventures, is one of Singapore’s larger fintech unicorns. The firm started as a remittance company before scaling its B2B payments product to cover forex, card issuance, payment management and others. It holds licences and regulatory approvals in over 40 markets globally.
Nium’s founder and CEO Prajit Nanu had told Bloomberg in July last year that it expects to IPO in the second quarter of 2025, and has set aside about $50 million to embark on new acquisitions in emerging markets like Latin America, Africa and the Middle East.
