The Enforcement Directorate (ED) has seized an amount of Rs 106.93 crore lying in the bank accounts and virtual accounts belonging to PC Financial Services Private Limited (Non-Banking Financial Company) under the provisions of Foreign Exchange Management Act.
The ED is investigating a number of NBFCs and Fintech companies under money laundering for providing instant micro loans using mobile apps and then extorting high rate of interest by using the personal data of the customers illegally and threatening and abusing them through call centres.
During the money laundering investigation, the ED also initiated an investigation under FEMA against PC Financial Services Private Limited (PCFS) that provides instant personal micro loans through its mobile application ‘Cashbean’ for suspicious foreign outward remittances.
The PCFS is a wholly owned subsidiary of Oplay Digital Services, SA de CV, Mexico, which is in turn a subsidiary of Tenspot Pesa Limited, Hong Kong which is owned by Opera Limited (Cayman Islands) and Wisdom Connection I Holding Inc (Cayman Islands), which are ultimately beneficially owned by Chinese National Zhou Yahui.
The original Indian Company PCFS was incorporated in 1995 by Indian nationals and got NBFC license in 2002 and after RBI approval in 2018, the ownership moved to the Chinese controlled company. Investigation further revealed that the foreign parent companies of PCFS brought in FDI worth Rs 173 crore for lending business and within a short span of time, made foreign outward remittances worth Rs 429.29 crore in the name of payments for software services received from related foreign companies.
The PCFS also showed high domestic expenditure of Rs 941 crore. Detailed investigation into the foreign expenses paid by the NBFC revealed that most of the payments were made to foreign companies, which are related and owned by the same Chinese nationals, who own the Opera Group.
All the foreign service providers were chosen by the Chinese owners and the price of the services was also fixed by them.