Enforcement Branch seizes assets from lending application companies

Posted: Date Posted – 6:54 PM, Wed – 27 Apr 22

Hyderabad: The Enforcement Directorate (ED) has provisionally seized assets worth Rs 6.17 million from people behind instant lending app companies in different merchant accounts and IDs held at various fintech companies and maintained with various banks and payment gateways.

The ED had earlier opened an investigation into two reserved FIRs at Marathahalli and Mahalakshmipuram police stations in Bengaluru in relation to instant loan app fraud.
Officials said the investigation revealed that the defendants in the case as well as Chinese nationals had opened various companies in the names of different people for the purpose of carrying out illegal transactions, issuing loans and increase investments via mobile applications such as Cash Master, Krazy Rupee, Cashin, Rupee Menu. etc

“These companies were incorporated during the period of the Covid pandemic with common addresses and active involvement of certain Chinese nationals in collusion with certain Indian accountants. KYC documents of young Indians in need of money were seized and they were made directors or shareholders of these companies,” they said.

The bank accounts were mainly managed by Chinese nationals on whose instructions the said companies were incorporated. Accounts and payment gateways opened on the basis of KYC documents of Indian nationals have been used to provide loans to the public with high processing fees and usurious interest rates. For loan recovery, unethical means have been adopted.

“These short-term loans were granted using funds received from overseas, mainly China, with the intention of charging usurious interest rates. The investigation also revealed that these companies have accumulated and transferred the funds overseas,” officials said.

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