The Karnataka High Court has warned the Enforcement Directorate (ED) that it may impose a ₹1 lakh fine if the agency’s appeal against the bail of WinZO cofounder Paavan Nanda proves unnecessary or without foundation. The court on April 10, 2026, directed the ED to produce concrete evidence showing any breach of bail conditions or concealment of facts by Nanda; the matter is listed next on April 23, 2026.
ED’s allegations: fraud, manipulation and laundering
The ED has accused WinZO, its subsidiary Zo Pvt. Ltd., and founders Paavan Nanda and Saumya Singh Rathore of offences under the Prevention of Money Laundering Act (PMLA). The agency alleges the gaming platform employed bots, artificial intelligence and proprietary algorithms to manipulate game outcomes, creating an unfair advantage over genuine users.
According to the ED, WinZO initially paid small rewards to build user confidence but subsequently deployed more powerful bots, resulting in significant user losses. The agency estimates aggregate user losses at about ₹734 crore and contends the platform generated alleged illicit proceeds exceeding ₹3,500 crore between FY22 and August 2025. Parts of these funds are alleged to have been routed to entities in the United States and Singapore.
So far, the ED has provisionally attached assets worth ₹1,194 crore and undertaken additional seizures under FEMA provisions. The agency also alleges the company made systematic attempts to frustrate user withdrawals.
Arrests, bail orders and concurrent legal actions
Both cofounders were arrested in November 2025. Saumya Singh Rathore secured bail in December under statutory protections for women, while Paavan Nanda obtained bail in February 2026 subject to stringent conditions, including surrender of passport and cooperation with the investigation.
In a related development, the Karnataka High Court permitted Zo Pvt. Ltd. to utilise certain frozen bank accounts to meet employee salary obligations, observing that the ED cannot immobilise all accounts on the basis of a limited case. Separately, One 97 Communications has initiated insolvency proceedings against WinZO seeking recovery of ₹3.6 crore in unpaid dues, adding to the company’s mounting legal and financial pressures.
