The Enforcement Directorate (ED) on Wednesday said it has attached funds worth ₹6.17 crore of various fintech companies in a case linked to dishing out mobile-app based loans at exorbitant interest rates to gullible people during the COVID-19 crisis.
A provisional order to attach the money was issued under the Prevention of Money Laundering Act (PMLA), it said.
"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 said, explaining the modus operandi employed in the alleged fraud.
"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 companies' bank accounts were being "operated or controlled" by Chinese nationals, on whose instructions they were incorporated. The fintech (financial technology) firms utilised their own funds received from abroad, mainly from China, to issue short-term loans through non-banking financial companies (NBFCs), the ED said.
The account numbers/payment gateways opened on the basis of Know Your Customer (KYC) documents of these Indian nationals were utilised to provide the loans, and "high processing fees and usurious interest rates" were charged, the ED said.
Unethical measures were adopted to recover the loan amount and high interest rates, it noted.
It was found that these companies "layered and remitted" the funds abroad, it alleged.
The ED case against the accused stems from two FIRs filed by the Bengaluru police.
