Chinese link established in loan app scams, 4 arrested

Hyderabad: A month after Telangana police began a crackdown on illegal instant loan apps following the suicides of five people, the investigation has revealed a deeper Chinese connection to the scam. Police arrested at least four Chinese nationals for running the illegal apps. The police, having arrested the four, are also investigating the role of some other Chinese nationals. In the latest incident, Cyberabad Police arrested three people in connection with instant personal loan applications on January 22.

Those arrested are Hemanth Kumar Jha, Director of Flash Cash Pvt limited, Gurgaon, V Manjunath, HR Manager at Juss IT Technologies Pvt Ltd, Bangalore and Abdul Lauk, Director/Team Leader at TGHY Trust Rock Pvt Ltd. These arrests were made during the investigation into the suicide of a certain G Chandra Mohan (38 years old). He had taken out loans of Rs 70,000 from 11 different applications. “He repaid Rs 2,00,000 to these applications in installments. However, he was still harassed for being a defaulter. It drove him to suicide,” PV said. Padmaja, Deputy Commissioner of Police (Balanagar), Cyberabad.

Chandra Mohan, a supermarket worker, hanged himself on January 2 due to the alleged harassment.

The police discovered in their investigations that the three companies offered small loans through different apps on the Google Play Store. They collected reimbursements through harassment and blackmail.

Hemanth developed apps with the help of a Michael from China. He was running his office in Gurgaon to maintain the database of clients.

Police were also investigating the role of a Bhutanese national, who lives in India. He is a director of a company associated with the disbursement of loans via applications.

Surveys revealed that after providing loans to customers for seven days, companies used to divide customers into different categories. They would then collect the refund first by calling them. In the next step, they were texting, then WhatsApp messages and followed by emails. The last method was to call customers’ relatives and defame them.

“To recover the loan from the customers, they practiced different methods depending on the contributions. In case of higher contributions, the treatment was very harsh, threatening and abusive. They also accessed the contacts of customers’ relatives and friends and sent them WhatsApp messages defaming the defaulters,” the DCP said.

Businesses charged an interest rate of 35% per annum from customers who repaid the loan amount on time. They imposed huge penalties on offenders. The harassment began shortly after the clients passed their due date.

Police also discovered that these apps were linked to non-bank finance companies (NBFCs). Police said notices will be sent to all NBFCs. The police also wrote to Google to take down the apps because of their criminal activities.

The modus operandi in this case is no different from other cases solved by the police over the past month. More than 30 defendants, including four Chinese nationals, were arrested by police from Hyderabad, Cyberabad and Rachakonda, the three commissioners who cover Greater Hyderabad.

It was on December 4 that ES Yadav (23) from Narsapur in Medak district hanged himself. He couldn’t stand the harassment from loan applications. He had taken out a loan of around Rs 6,000. K. Mounika (28), an agricultural extension worker, committed suicide by consuming poison on 16 December. She had taken several loans from various apps to the tune of Rs 2.5 lakh.

Then on December 17, Sunil, a 29-year-old technician hanged himself here. He had taken a loan of Rs 70,000 to 80,000 and was asked to return more than Rs 2,00,000. When he could not repay, the app representatives defamed him by sending messages to all his contacts.

According to the Director General of Police, Mr Mahender Reddy, 50 cases have been registered in relation to instant loan applications. The first arrests came on December 22 during a crackdown by Hyderabad and Cyberabad police on five call centers located here and in Gurgaon.

Hyderabad Police arrested 11 people while Cyberabad Police caught six people in the multi-crore money lending racket.

Police said thousands of people across India were targeted through instant loan apps after the lockdown.

“Here the call centers employed 600 callers and in Gufgaon there were almost 500 callers. They serviced 30 money lending applications. These money lending app companies were operating illegally without following RBI guidelines. They subjected people who borrowed money to harassment, forcing some of them to commit suicide,” Hyderabad Police Commissioner Anjani Kumar said.

The first Chinese was arrested on December 25 in racketeering. He was identified as Yi Bai alias Dennis from Delhi. He ran at least 11 such apps offering small loans at extremely high interest rates. The main defendant is suspected to be another Chinese national, Zixia Zhang, who is currently in Singapore.

Police believe that four companies run by the accused allegedly carried out 1.4 crore deals worth nearly Rs 21,000 crore. He would have been in contact with another Chinese national, Yuan Yuan alias Sissi alias Jennifer, who set up the operations in India but who is said to be in China.

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