ED crackdown on owners of Cashbean loan app continues, Rs 300 crore tied – The New Indian Express
NEW DELHI: The Directorate of Execution (ED) seized an additional amount of Rs 51.22 crore lying in bank and virtual accounts with payment gateways of financial technology company PC Financial Services Private Limited (NBFC). The executing agency has already tied 238 crore rupees to Gurgaon-based PC Financial Services, which provides instant personal microloans through its “Cashbean” mobile app.
ED alleged that the PCFS is controlled by a Chinese national through a maze of shell companies. He also accused the company of money laundering and violation of the Foreign Exchange Management Act (FEMA).
According to the law enforcement agency, PCFS is a wholly owned subsidiary of Oplay Digital Services, SA de CV, Mexico, which in turn is owned by TenspotPesa Limited of Hong Kong. TenspotPesa, meanwhile, is owned by Opera Limited (Cayman Islands) and Wisdom Connection I Holding Inc (Cayman Islands), which ultimately belong to Chinese national Zhou Yahui. The original Indian company PCFS was incorporated in 1995 by Indian nationals and obtained the NBFC license in 2002 and after RBI approval in 2018, the ownership was transferred to the Chinese controlled company.
ED investigations reveal that the fintech company provides micro-loans through its mobile app for suspicious foreign remittances.
Investigations found that the foreign parent companies of PCFS brought in Rs 173 crore from FDI for lending activities, and within a short period of time, sent out remittances worth $ 429. Rupee crores on behalf of payments for software services received from related foreign companies. .
The fintech company also posted high domestic and foreign spending. A detailed survey of foreign spending paid by the NBFC found that most of the payments were made to foreign companies, which are related and owned by the same Chinese nationals.
ED also discovered that exorbitant payments had been authorized by the bogus Indian directors of PCFS without any due diligence on the instructions of country chief Zhang Hong, who reported directly to a certain Zhou Yahui in China.
PCFS handed over currency worth Rs 429 Crore to 13 foreign companies located in Hong Kong, China, Taiwan, United States and Singapore as payment of license fees for the Cash Bean Mobile app (Rs 245 Crore per year), software technical costs (around Rs 110 Crore), online marketing and advertising costs (around Rs 66 Crore).
According to the Enforcement Branch, all of these services and applications are available in India for a fraction of the cost incurred by PCFS.
The agency further states that although all of NBFC’s customer base is in India, huge payments have been made overseas without any proof of receipt of the service. Simultaneously, during the same period, the PCFS also recorded domestic expenditure of a similar amount (of Rs 941 crore) under the same expenditure headings.
PCFS management did not provide any justification for these expenses and admitted that all remittances were made to move money out of India and park it overseas in corporate accounts in the group controlled by the Chinese promoter.