The Enforcement Directorate (ED) has provisionally attached assets worth Rs 6.17 crore lying in various accounts/merchant IDs held in the name of various fintech companies/associated persons maintained with various banks/payment gateways, under the Prevention of Money Laundering Act.
The ED probe has revealed that the accused persons along with Chinese nationals opened various companies in the name of various persons for the purpose of illegal transactions, issuing loans and raising investments through mobile Apps like Cash Master, Krazy Rupee, Cashin and Rupee Menu among others, the ED said in a statement. The ED had initiated money laundering investigation on the basis of two separate FIRs registered by Marathahalli and Mahalakshmipuram police stations, Bengaluru under various sections of the Indian Penal Code (IPC).
“Notably, these companies were incorporated during Covid time at common addresses by active involvement of some Chinese nationals in connivance with certain Indian Chartered Accountants who helped in incorporation of these companies by using KYC (know your customer) documents of young Indian nationals in need of money who were made directors/shareholders in these companies,” it said. The bank accounts of the companies were being operated/controlled mainly by the Chinese nationals on whose instructions the said companies were incorporated. 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.
“The fintech companies utilized their own funds received from abroad (mainly from China) for the purpose of giving loans at usurious rate of interest to the unemployed youth and other vulnerable section of the society, through the NBFCs by making arrangement of security deposit of the amount equivalent to the loans granted by the NBFCs to the borrowers,” it said.