‘Tip of the iceberg’: Karnataka HC directs WinZO co-founder to cooperate with ED, extends interim relief

The Karnataka High Court on Thursday extended interim protection to Saumya Rathore, co-founder and director of WinZO Games Pvt Ltd, restraining the Enforcement Directorate (ED) from taking any coercive action against her in connection with a money-laundering probe, while directing her to continue cooperating with the investigation.

Bench of Justice M Nagaprasanna heard the matter and said that the interim order earlier granted in Rathore’s favour would continue and posted the case for final hearing on January 23, 2026.

Rathore has challenged the ED’s jurisdiction to investigate the online gaming platform and its representatives from Bengaluru, arguing that the agency’s probe lacks territorial jurisdiction. She has sought the quashing of an Enforcement Case Information Report (ECIR) registered by the ED’s Bengaluru zonal office on November 6, 2025, along with its addendum and all consequential proceedings initiated under the Prevention of Money Laundering Act (PMLA), 2002.

She has also assailed the remand orders passed by a Bengaluru special court, contending that they were issued without jurisdiction.

During Wednesday’s hearing, Senior Counsel Sajjan Poovaya representing Rathore submitted that she had already appeared before the investigating agency on two occasions and cooperated fully by answering all questions. The plea argued that the predicate offence underlying the ED case related to the alleged misuse of a PAN card involving a tax deduction at source (TDS) amount of around ₹1,100, and that the complainant herself had clarified she had no allegations against WinZO.

The petitioner further contended that while the alleged proceeds of crime in the predicate offence amounted to about ₹10 lakh, the ED had frozen bank accounts worth nearly ₹800 crore, calling the action disproportionate.

The Enforcement Directorate told the court that the alleged PAN misuse cited in the case was “only the tip of the iceberg”, indicating that its probe goes beyond the limited tax deduction issue flagged in the complaint.

The court, while noting the submissions, declined to halt the investigation but directed that any further questioning of Rathore by the state investigating agency should be time-bound and not extend through the entire day. It also clarified that the ED would not take any precipitative or coercive steps against her until the next date of hearing.

The judge observed that Rathore would have to continue cooperating with both the state investigation and the ED probe, even as her challenge to jurisdiction remains pending.

The matter will be taken up next on January 23, 2026.

The ED’s probe arises out of multiple FIRs registered against WinZO Games Pvt Ltd and others, alleging cheating, impersonation, blocking of customer accounts, and misuse of identity documents. Based on these FIRs, the agency registered an ECIR and arrested Rathore and co-founder Paavan Nanda on November 26, 2025, under the PMLA.

The ED has alleged that the company engaged in unfair practices in real money games by deploying algorithms and software without adequately disclosing to users that they were not competing against human players. It has also alleged that customer withdrawals were restricted and that proceeds of crime were generated from bets placed and lost by users on the platform.

According to the agency, proceeds of crime amounting to more than ₹505 crore have been frozen in the form of bank balances, fixed deposits, bonds, and mutual fund investments. The ED has further alleged that the company operated real money gaming services in overseas markets such as the US, Brazil, and Germany from India, and diverted funds abroad under the guise of overseas investments.

WinZO has denied any wrongdoing and has contested both the allegations and the jurisdiction of the ED’s Bengaluru-based proceedings.