Chinese loan application case: ED attaches more than 76 cr assets | Latest India News

The ED has attached assets of more than ??76 crore, including certain financial technology companies “controlled” by Chinese nationals and financial technology major Razorpay, in money laundering investigation against certain Chinese “loan application” companies whose intimidation tactics have reportedly forced many debtors to end their lives during the stressful time of Covid-19.

The central investigative agency said in a statement that its criminal investigation, under the provisions of the Prevention of Money Laundering Act (PMLA), is based on several FIRs filed by police from the Criminal Investigation Department. (CID) in Bengaluru after receiving “complaints from various clients who had used loans and who were harassed by the collectors of these money lending companies.”

Numerous cases of blackmail and extortion by these “loan sharks” resulting in suicide deaths of gullible debtors were reported last year after the coronavirus infection and the start of the resulting lockdown in the country.

This is the first case of a criminal asset seizure by the ED in these cases, which is also investigating other cases of this nature in other states.

The amount attached by the Directorate of Execution (ED), according to the press release, “concerns seven companies, three of which are financial technology (fintech) companies, namely Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited and Cloud Atlas Future Technology Private Limited, which are controlled by Chinese nationals and three NBFC (non-bank financial companies) registered with the RBI.

The NBFCs are X10 Financial Services Private Limited, Track Fin-ed Private Limited and Jamnadas Morarjee Finance Private Limited, the managing director said.

He said the FinTech companies have “an agreement” with the respective NBFCs for loan disbursement through digital lending applications.

“The amount attached by ED also includes an amount of fees invoiced by Razorpay Software Private Limited to the extent of ??86.44 lakh for failing to do due diligence in the event that a company registered with it for the disbursement and collection of loans, ”he alleged.

The total amount of the property attached under the last provisional order issued under the PMLA is ??76.67 crore and some Indians are also under the ED scanner in these cases.

The agency said its investigation revealed that Chinese loan applications “offered loans to individuals and charged usurious interest rates and processing fees.”

Loan applications through their debt collectors have resorted to systematic abuse, harassment and threat of defaulters through call centers for coercive loan collection by obtaining sensitive user data. stored on cellphones such as contacts, photographs and using them to defame or blackmail the borrower, ”the ED said.

He said the people behind these loan applications “even threatened borrowers by sending bogus legal notices to their relatives and family members.”

ED has stated that this money lending activity run by these FinTech companies is illegal or “unauthorized” by any law.

“These NBFCs knowingly let these FinTech companies use their names for the purpose of earning a commission regardless of the conduct of these FinTech companies in their dealings with customers who are a vulnerable part of society and who have urgently needed funds due to the current situation. pandemic situation (Covid-19) “.

“This is also a violation of the RBI Code of Fair Practices,” he said.

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