The Enforcement Directorate (ED) carried out search operations against two companies and associated individuals in the last week of December. This action is part of an ongoing money laundering investigation concerning a Chinese loan app case. According to the ED, both companies are owned by Chinese nationals.The investigation centres on these entities, which are accused of providing short-term loans through mobile phone apps and subsequently harassing borrowers by accessing their personal details, including the threat of circulating morphed photographs.
Raids conducted at 19 locations
According to the ED statement, the raids were conducted on December 21 last year at 19 locations in Delhi-NCR, Chandigarh, Haryana, Punjab, and Gujarat against Shinebay Technology India Private Limited (STIPL), Mpurse Services Private Limited (MSPL), and others that are owned and controlled by Chinese nationals. During the search operations, cash of Rs.1.30 Crore was recovered and seized, and various incriminating documents and digital records were also recovered and seized.
The ED initiated investigation on the basis of FIRs registered against several companies/persons in Bengaluru, Kazipet and Jangaon. The investigation revealed that fintech companies, non-banking financial companies (NBFCs) and payment aggregators/gateways in collaboration, owned and controlled by Chinese nationals, provided short-term instant loans through mobile apps in exchange of exorbitant rate of interest on loans given to the needy people. They also harassing customers by engaging in deceptive and unethical practices such as unauthorised access to the borrower’s photo gallery and phone contact list, imposing exploitative rates of interest and processing fees, resorting to systematic abuse and threats in case of repayment failure by the borrower.Intentionally leaking borrower data, circulating morphed photographs of the borrower to their contacts, as well as their family members, and sending fake legal notices are among the unethical practices identified in the investigation.
Complex web of fintech companies and NBFCs
The ED revealed that such companies have employed dummy directors and subscribers in India to conduct business on behalf of the Chinese individuals and companies. Chinese nationals created a complex web of fintech companies and NBFCs in India with the help of professionals such as chartered accountants, lawyers, company secretaries and consultants.
The ED had earlier conducted search operations on June 14, 2023 at six locations and seized various incriminating documents, digital devices, bank accounts, fixed deposits containing balance of Rs 19.43 crore.