Synopsis
The Karnataka High Court warned the Enforcement Directorate (ED) of Rs 1 lakh costs if its appeal against real money gaming company WinZo's cofounder's bail is deemed unnecessary. The ED must prove bail condition violations or fact suppression. The case involves allegations of money laundering, with the ED claiming WinZo used AI bots and restricted withdrawals to generate illegal proceeds.Justice S Rachaiah told ED’s counsel that the agency would have to establish violation of the bail conditions by Nanda or an active attempt by him to suppress the facts of the case.
Otherwise, if the court found the ED’s challenge to be unnecessary, it would impose costs. The judge posted the next hearing of the case for April 23.
In February, a Bengaluru court granted bail to Nanda in the money-laundering case registered against him by the ED.
Nanda has denied ED’s charges, promised full cooperation with the investigation, and challenged the legality of the search and seizure operations conducted by the agency.
The court had earlier rejected ED’s plea to cancel the bail of the other cofounder, Saumya Singh Rathore, per certain protections accorded to women.
ED’s case against WinZo’s promoters arose from predicate offences per the FIRs registered in Bengaluru, Rajasthan, and Delhi.
In February this year, ED’s Bengaluru office provisionally attached movable assets worth about $56 million held by WinZo in its bank accounts in the US and Singapore, in connection with the ongoing probe under the Prevention of Money Laundering Act (PMLA). The funds were held in the names of overseas shell companies of WinZo and were operated and controlled by Nanda and Rathore, the ED said in an earlier statement.
ED officials conducted search and seizure operations at WinZo’s office, the residences of its directors, and the company’s accounting firm last November and December.
The evidence gathered during the search and subsequent investigations revealed, according to the ED, that the company was engaged in criminal activities and unscrupulous practices. Customers were made to play with AI bots / algorithms and not with humans in real money games. The company concealed such practices under misleading terms such as EP (Engagement Play), PPP (Past Performance of Player), and Persona.
WinZo generated proceeds of crime in the form of ‘rake commission’ from matches played by bots with real players. The app used bots to induce people to play more and restricted cash withdrawals, thus appropriating customers’ funds.
This mechanism enabled the company to convert users’ deposits into revenues, and in this way, the company generated illegal proceeds of about Rs 3,522 crore between FY22 to FY26 (till August 22, 2025), per an ED statement. The company moved a part of these proceeds to the US and Singapore under the garb of overseas investments, the ED has alleged.
The company, however, conducted all its day-to-day business activities and maintained bank accounts in India. The ED has so far frozen Rs 1,194 crore in these accounts in connection with the case.
