ED Ties Assets Worth Rs 76 Crore In Chinese Loan Application Scam


Illustration for representational purposes (Siddhant Jumde)

The Directorate of Execution (ED) has tied up money to the tune of Rs 76.67 crore, located in various bank accounts and payment gateways, in connection with Chinese loan application companies and their Indian associates. , officials said.

The amount attached by ED is for seven companies, three of which are financial technology companies – 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 NBFCs ( Non-bank financial company) registered with RBI, namely X10 Financial Services Private Limited, Track Fin-ed Private Limited and Jamnadas Morarjee Finance Private Limited.

“The FinTech companies have an agreement with the respective NBFCs for loan disbursement through digital lending applications. The amount attached by ED also includes the amount of fees charged by Razorpay Software Private Limited to the extent of Rs 86.44 lakh for failing to exercise due diligence in the case of a company registered with it for the loan disbursement and collection, ”the ED said.

ED claims that these Chinese loan apps offered personal loans and charged usurious interest rates and processing fees. Later, loan applications through their debt collectors allegedly resorted to systematic abuse, harassment and threats against defaulters through call centers for coercive loan collection by securing creditors. sensitive user data stored on the mobile such as contacts, photographs and using them to defame or blackmail the borrower.

“They even threatened borrowers by sending bogus legal notices to loved ones and family members. The investigation further revealed that the money-lending business was indeed managed by those FinTech companies for which they are not allowed to do so under any law and that these NBFCs knowingly left these companies to. fintech 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 are in urgent need of funds due to the prevailing pandemic situation. The same is also a violation of RBI’s code of fair practices, ”the ED added.

The ED had opened its investigation on the basis of various FIRs registered by the Criminal Investigation Department of the Bengaluru Police (CID) on the basis of the complaints received from various clients, who had received a loan and faced harassment from the collection agent of these money lending companies.

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