The Karnataka High Court on Friday (October 9) rejected an interim application filed by WinZO US Inc. seeking permission to transfer funds lying in its US bank accounts to another bank in the United States while keeping the Enforcement Directorate's (ED) attachment over the funds intact.

Justice C.M. Poonacha observed that allowing such a transfer would “tantamount to diluting the Provisional Attachment Order and the subsequent Confirmation Order,” which are under challenge before the Court.

The Court however granted liberty to the petitioners to approach Silicon Valley Bank for release and subsequent transfer of the funds in accordance with the directions of the ED.

The petitioners had sought to transfer the funds after Silicon Valley Bank informed them that their banking relationship would be terminated and the accounts closed.

They argued that the funds would remain attached even after being transferred to another US bank and that they needed to remain in the US as the company was carrying on business there.

The ED opposed the plea, arguing that transfer of the attached funds posed a risk of their dissipation. It also submitted that attempts had allegedly been made to dissipate ₹22.48 crore while the company's directors were in judicial custody.

The agency further submitted that its investigation was ongoing and involved alleged siphoning of proceeds of crime amounting to around ₹3,522 crore through overseas transfers to WinZO's wholly owned subsidiaries.

The Court noted that the investigation was still continuing and that the details of the operations and business activities of the US subsidiary had not been placed on record.

It further observed that the funds were already subject to the provisional attachment order and its subsequent confirmation, the validity of which was yet to be adjudicated in the pending writ petition.

The Court also allowed the petitioners to amend their writ petition to challenge the confirmation order dated August 4, 2026.

The two foreign subsidiaries have challenged the attachment of their assets worth ₹505 crore under the Prevention of Money Laundering Act, 2002 (PMLA), besides questioning the constitutional validity of the PMLA Adjudicating Authority.

Senior Advocate Siddharth Aggarwal appeared for the petitioners, while Advocate Madhukar Deshpande appeared for the ED.