The Karnataka High Court has warned the Enforcement Directorate (ED) over its appeal against the bail of WinZO cofounder Paavan Nanda. During a hearing on April 10, 2026, the court said it may impose a ₹1 lakh fine if the appeal turns out to be unnecessary or weak.
Justice S. Rachaiah clearly told the ED that it must show proper proof. The agency needs to prove that Nanda either broke his bail conditions or tried to hide facts. If it fails to do so, the court may penalise it. The next hearing in this case is scheduled for April 23, 2026. This comes at a time when WinZO is already under investigation in a major financial case.
ED Alleges Fraud And Money Laundering
The ED has accused WinZO, its subsidiary Zo Pvt. Ltd., and founders Paavan Nanda and Saumya Singh Rathore of serious wrongdoing under the Prevention of Money Laundering Act (PMLA).
According to the agency, the platform used bots, AI, and special algorithms to control game results. This allegedly gave the company an unfair advantage over real users. The ED claims that users were first given small rewards to build trust. But later, stronger bots were used, leading to heavy losses. It estimates that users lost around ₹734 crore.
The agency also said WinZO made it hard for users to withdraw their winnings. Overall, it claims the company generated illegal income of over ₹3,500 crore between FY22 and August 2025. Some of this money was allegedly sent to foreign entities in the US and Singapore. So far, assets worth ₹1,194 crore have been attached, and more have been seized under FEMA rules.
Arrests, Relief And More Legal Trouble
Both cofounders were arrested in November 2025. Saumya Singh Rathore got bail in December under special provisions for women. Paavan Nanda was granted bail in February 2026 with strict conditions like surrendering his passport and cooperating with the investigation.
In another relief, the Karnataka High Court allowed Zo Pvt. Ltd. to use its frozen bank accounts to pay employee salaries. The court said the ED cannot freeze all accounts based on a small case. Meanwhile, One 97 Communications has filed an insolvency case against WinZO over unpaid dues of ₹3.6 crore. This adds more pressure on the company as it continues to face multiple legal challenges.