Law Enforcement Branch seizes Rs 131 crore from Chinese loan application company for violating FEMA | Hyderabad News

HYDERABAD: Enforcement Directorate (ED) seized Rs 131 crore lying in bank accounts and virtual accounts with payment gateways belonging to lending app company PC Financial Services (PCFS) Private Limited under provisions of the Foreign Exchange Management Act (FEMA). With the latest action, ED has so far seized Rs 237 crore belonging to the company.
ED had uncovered FEMA breaches while investigating money laundering allegations against the lending app company and earlier seized Rs 106 crore.
The company offers instant personal micro-loans through its “Cashbean” mobile application. It turned out he had suspicious foreign remittances. PCFS allegedly illegally transferred huge funds out of India under the guise of software imports and non-existent marketing services to park funds overseas and hold them in the accounts of related foreign companies.
PCFS is a wholly owned subsidiary of Oplay Digital Services, SA de CV of Mexico, which in turn is a wholly owned subsidiary of Tenspot Pesa Limited of Hong Kong. Tenspot is owned by Opera Limited and Wisdom Connection I Holding Inc of the Cayman Islands, which are ultimately beneficially owned by Chinese national Zhou Yahui. The original Indian company, PCFS, was incorporated in 1995 by Indian nationals and obtained the NBFC license in 2002. After RBI approval in 2018, ownership was transferred to the Chinese-controlled company.
ED, in a press release on Thursday, said, “The investigation further revealed that the foreign parent companies of PCFS had brought in FDI worth Rs 173 crore for lending activities and within a short span of time, made foreign remittances worth Rs 429 crore in the name of payments for software services received from related foreign companies. PCFS also showed high domestic spending of Rs 941 Crore.
“A detailed investigation into foreign expenditures paid by NBFC revealed that most of the payments were made to foreign companies, which are related and owned by the same Chinese nationals, who own the Opera Group,” ED said in the statement. communicated.
ED discovered that exorbitant payments were blindly authorized by the dummy Indian directors of PCFS without any due diligence and, on the instructions of the country’s leader Zhang Hong, who reported directly to Zhou Yahui.
“PCFS handed over currency worth Rs 429 Crore to 13 foreign companies in Hong Kong, China, Taiwan, USA and Singapore under the guise of payments for license fees for the mobile application “Cashbean “Rs 245 crore per annum, software technical fee of around Rs 110 crore, online marketing and advertising fee of around Rs 66 Crore. These services are available in India at a fraction of the cost incurred by PCFS,” said ED.

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