E-Paper
ED attaches ₹77cr of Chinese firms in fraud case
The ED said its money laundering investigation revealed that these Chinese loan apps offered loans to individuals and levied usurious rate of interest and processing fees.
The Enforcement Directorate (ED) has attached ₹76.67 crore, lying in various bank accounts and payment gateways pertaining to Chinese loan app companies and their Indian associates, agency said in a statement said.
The central anti-money laundering probe agency had launched a probe against China backed fintech lenders in January this year on the basis of various FIRs registered by CID, Bengaluru based on the complaints received from various customers, who had availed loan and faced harassment from the recovery agent of these money lending companies.
In a statement, ED said “the amount attached by it pertains to seven companies out of which three are fintech companies namely Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited and Cloud Atlas Future Technology Private Limited which are controlled by the Chinese nationals and three NBFCs (Non-Banking Financial Companies) registered with RBI (Reserve Bank of India) namely - X10 Financial Services Private Limited, Track Fin-ed Private Limited and Jamnadas Morarjee Finance Private Limited.”
“The Fintech companies have agreement with respective NBFCs for disbursement of loans through digital lending apps. The amount attached by ED also include amount of fee charged by a leading Bengaluru based fintech payment company to the extent of ₹86.44 lakhs for not conducting due diligence in case of one company enrolled with it for disbursement and collection of loans,” agency said.
The ED said its money laundering investigation revealed that these Chinese loan apps offered loans to individuals and levied usurious rate of interest and processing fees.
“The loan apps through their recovery agents resorted to systematic abuse, harassment and threatening to the defaulters through the call centres for coercive recovery of the loans by obtaining sensitive data of the user stored on mobile such as contacts, photographs and using them to defame or blackmail to the borrower. They even threatened the borrowers by sending fake legal notices to their relatives and family members,” agency statement added.
“Investigation further revealed that the money lending business has been indeed being run by these fintech companies for which they are not authorized to do under any law and these NBFCs knowingly let these fintech companies to use their names for the sake of getting commission without being careful about the conduct of these fintech companies in dealing with the customers who are vulnerable section of the society and are in dire need of funds due to prevailing pandemic situation. The same is also violation of the Fair Practices Code of RBI,” it said.
