The Enforcement Directorate’s (ED) money-laundering investigation into the Chinese-controlled loan apps case has revealed that a few accused entities under the scanner had allegedly been incorporated on the basis of the appointment of dummy directors.
The probe has found that several employees of the firms had allegedly been made directors and their KYCs (Know Your Customer) were obtained to open bank accounts in their names without their consent, sources said.
Entities/firms involved in illegal and criminal activities
“These entities / firms were involved in illegal and criminal activities by submitting fake addresses in KYC documents and taking assistance from various professionals and other persons,” a source said. “The accused entities provided instant short-term loans to the public through loan apps and other means and charged high processing fees and exorbitant rates of interest,” the source said.
The loan amounts were subsequently recovered from the public by these companies allegedly by way of threatening and causing mental torture to the borrowers over the phone as well as contacting their family members, relatives and friends, the source said. The firms were allegedly controlled by a few Chinese nationals and their firms are accused of indulging in “huge money laundering activities through the merchant IDs maintained with various payment gateways and bank accounts maintained with various banks and thereby generating proceeds of crime”, the source said.
₹106 crore movable assets attached
The ED has so far provisionally attached movable assets to the tune of ₹106 crore in the case. The agency had last month filed its charges against 12 entities and individuals, including three Reserve Bank of India-registered Non-Banking Financial Companies NBFC) and three Chinese- controlled fintech firms. The NBFCs were accused of letting the loan apps run their business by using their names in lieu of commission.
The ED had commenced its probe on the basis of cases registered by the Cyber Crime Police Station, Bengaluru. under sections of the Karnataka Money Lenders Act, 1961, Information Technology Act, 2000, Karnataka Prohibition of Charging Exorbitant Interest Act, 2004, and the Indian Penal Code. The cases were registered over allegations related to extortion and harassment of public who had availed small amounts of loans through mobile apps.