The Enforcement Directorate (ED), Bengaluru Zonal Office, has seized assets worth Rs 590 crore of M/s Winzo Pvt. Ltd. and its subsidiary M/s Zo Pvt. Ltd. under Section 37A of the Foreign Exchange Management Act (FEMA), 1999, for alleged contraventions of Section 4.
The seizure, announced on 19 February 2026, includes bank accounts, fixed deposits, mutual funds, and bonds. The action secures the assets during the pendency of proceedings.
Alleged Overseas Direct Investment Violations
The ED alleges that Winzo acquired USD 54,255,010 (approximately Rs 492 crore) in foreign exchange for overseas direct investments in breach of FEMA and the Overseas Investment Rules, 2022. The investments were made in:
- M/s Winzo US Inc., USA
- M/s Winzo SG PTE Ltd., Singapore
According to the agency, these investments violated regulatory conditions governing overseas subsidiaries.
Overseas Operations and Management Control
Investigators claim that real money gaming operations conducted abroad were controlled from India.
Through its US subsidiary, Winzo reportedly offered gaming services in Brazil, Germany, and the United States. Games cited include Bingo, Ludo, Snakes and Ladders, Mines, Solitaire, Spades, and Black Jack.
The ED alleges that the foreign subsidiaries lacked independent establishments and that management decisions, accounting functions, and banking operations were handled from India. It also states that Winzo SG PTE Ltd. earned licensing income from the “Call-break” game licensed to the Indian entity.
Alleged Breach of Overseas Investment Rules
The ED has cited violations of Rule 19(1)(b) and Rule 9(1) of the Foreign Exchange Management (Overseas Investment) Rules, 2022. The agency contends that:
- The subsidiaries were engaged in gambling or real money gaming activities.
- Such activities were not permissible under applicable Indian regulatory conditions.
- Overseas investments in these sectors therefore contravened FEMA provisions.
The press release also references the Promotion and Regulation of Online Gaming Act, 2025, stating that online gaming has been banned in India and that continuation of related overseas investments would be impermissible.
Alleged Retention of Foreign Earnings
The ED alleges that foreign income generated abroad was retained in bank accounts of the US and Singapore subsidiaries.
The total value of alleged contraventions has been quantified at Rs 590 crore under Section 4 of FEMA, leading to seizure under Section 37A.
Investigation Status
The investigation remains ongoing.
The ED is examining fund flows, overseas transactions, and corporate structures linked to the subsidiaries. Further proceedings may follow based on the findings.
The case highlights increased regulatory scrutiny of cross-border investments and digital gaming businesses operating through foreign entities under India’s foreign exchange framework.
Source: ED Press Release dated 19/02/2026 regarding Winzo Group ODI FEMA Case