WinZO Cofounder Bail: K’taka HC Warns ED Of Costs For Frivolous Appeal

The Karnataka High Court (HC) yesterday reportedly warned the Enforcement Directorate (ED) that a cost of ₹1 Lakh would be imposed on the agency if the appeal against bail granted to gaming platform WinZO’s cofounder Paavan Nanda is found to be unnecessary.

As per a Bar and Bench report, Justice S Rachaiah said the agency’s appeal must show either a violation of bail conditions or an active attempt by Nanda to suppress facts in the case to avoid the cost. 

“Without these two, if I find this is an unnecessary challenge, I will impose ₹1 Lakh cost,” Justice Rachaiah reportedly said. The matter has been posted for next hearing on April 23.

This follows a Bengaluru sessions court, in February, granting bail to Nanda in a money laundering case filed by the ED. 

The case stems from FIRs registered across Karnataka, Rajasthan and Delhi, alleging offences such as cheating, impersonation, misuse of KYC details and wrongful blocking of user accounts.

ED has alleged that WinZO’s gaming platform used algorithmic manipulation and bots, leading to alleged wrongful gains of about ₹177 Cr. It has also claimed that the company diverted funds to overseas subsidiaries and routed proceeds of crime through cloud infrastructure hosted on Amazon Web Services.

The agency has further alleged large-scale identity misuse and cross-border fund flows of around $55 Mn.

Nanda, who has denied the allegations, reportedly said that he is cooperating with the investigation and has challenged the legality of the ED’s search and seizure operations.

The latest development comes as WinZO faces a wider legal and operational crisis following ED action in late-2025.

The agency had conducted searches at multiple locations linked to the company and froze assets worth hundreds of crores under the Prevention of Money Laundering Act. Overall, around ₹700-₹880 Cr of the company’s funds remain under freeze, putting pressure on its cash flows.

The ED has also alleged that the company continued real-money gaming operations in overseas markets such as the US, Brazil and Germany even after India’s regulatory clampdown in August 2025, with operations allegedly controlled from India.

According to investigators, funds were routed to overseas jurisdictions, including the US and Singapore, under the guise of foreign investments, with a portion parked in accounts linked to an overseas entity.

The crackdown has significantly hit the company’s operations. WinZO has scaled down its business, with a majority of its workforce exiting in recent months, and has slowed down new initiatives such as its short-video platform.

At the same time, the company is facing vendor disputes. Paytm has approached the National Company Law Tribunal over alleged unpaid dues. WinZO is also awaiting relief from the high court in a separate plea challenging the freezing of its funds, even as its cofounders continue to contest the ED’s case.

The post WinZO Cofounder Bail: K’taka HC Warns ED Of Costs For Frivolous Appeal appeared first on Inc42 Media.