The Enforcement Directorate (ED) announced on Wednesday that it had seized funds worth Rs 6.17 crore belonging to several fintech companies in a case involving the distribution of mobile-app-based loans to gullible people during the COVID-19 crisis. According to the report, a provisional order to seize the funds was issued under the Prevention of Money Laundering Act (PMLA).
‘The accused, along with Chinese nationals, opened various companies in the name of various persons for the purpose of illegal transactions, issuing loans and raising investments through mobile apps like Cash Master, Krazy Rupee, Cashin, Rupee Menu etc,’ the federal agency explained the alleged fraud’s method.
‘These companies have been incorporated during COVID spread time at common addresses by active involvement of some Chinese nationals in connivance with certain Indian chartered accountants, who helped in the incorporation of these companies by using KYC documents of young Indian nationals in need of money, who were made directors/shareholders in these companies,’ the ED statement read.
The bank accounts of the firms were ‘operated or controlled’ by Chinese nationals, who had incorporated them on their orders. According to the ED, fintech (financial technology) companies used their own cash, mostly from China, to provide short-term loans through non-banking financial companies (NBFCs).
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