Money laundering: ED cracks down on Chinese cos
Attaches assets worth Rs. 6.17 cr lying in various accounts
New Delhi: In the latest action against fintech companies controlled by Chinese, who had been providing short term loans and were allegedly involved in money laundering, the Enforcement Directorate (ED) on Wednesday said that it has attached assets worth Rs 6.17 crore lying in various accounts, merchant IDs belonging to the accused companies and persons.
This was done in connection with an ongoing probe in a Prevention of Money Laundering case.
The ED initiated the money laundering investigation on the basis of two separate FIRs registered at the Marathahalli Police station and the Mahalakshmipuram Police Station, Bengaluru, under various sections of the IPC.
The ED learnt during the investigation that the accused persons along with Chinese nationals opened various companies in the names of different persons for the purpose of illegal transactions, issuing loans and raising investments through mobile Apps like Cash Master, Krazy Rupee, Cashin, Rupee Menu etc.
"Notably, these companies have been incorporated during Covid time at common addresses by active involvement of some Chinese nationals in connivance with certain Indian chartered accountants who helped in the incorporation of these companies by using KYC documents of young Indian nationals in need of money who were made directors, shareholders in these companies. The bank accounts of the companies were being operated, controlled by mainly the Chinese nationals on whose instructions the said companies were incorporated," said an ED official.
The account numbers, payment gateways opened on the basis of KYC documents of these Indian nationals were utilised to provide loans to the public and high processing fees and usurious interest rates were charged. For the recovery of the loans and the high interest rates, unethical ways were adopted with the customers.
These short-term loans were provided by these fintech companies through Non-Banking Financial Companies (NBFCs).
The fintech companies utilized their own funds received from abroad (mainly from China) for the purpose of giving loans at usurious rates of interest to unemployed youth and other vulnerable sections of society, through the NBFCs by making arrangement of security deposit of the amount equivalent to the loans granted by the NBFCs to the borrowers.
During the course of investigation, it was also learnt that these companies layered and remitted the funds abroad. Further investigation in the matter is on.