As part of a continuing investigation into mobile phone-based loan apps allegedly run by Chinese nationals, the Enforcement Directorate (ED) has seized funds worth around Rs 1,060 million (£12.9m) held in various payment gateway merchant IDs and bank accounts under anti-money laundering law, according to the ED’s statement.
The ED launched a money laundering inquiry after becoming aware of several Bengaluru (Karnataka) Police FIRs filed against several entities that “coerced and intimidated” individuals who borrowed small amounts of money through mobile applications.
“These Chinese national-controlled entities have indulged in huge money laundering activities through the merchant IDs maintained with various payment gateways like Razorpay, Cashfree, Paytm, PayU, Easebuzz and bank accounts maintained with various banks, thereby generating proceeds of crime,” the ED said.
The ED probe found that these entities were incorporated by appointing “dummy” directors on behalf of Chinese nationals and they used to obtain KYC documents of company staff and appoint them as directors of such entities.
Even bank accounts were opened in their names, without their knowledge or prior consent, the agency said.
According to Indian authorities, these entities are involved in illegal/criminal activities by submitting fake addresses in KYC documents and taking assistance from various professionals and other persons.
“They provided instant short-term loans to the public through loan apps and other means and charged high processing fees and exorbitant rates of interest and amounts were subsequently recovered from the public by these companies by way of threatening and causing mental torture to the borrowers of the loans over the phone as well as contacting their family members, relatives and friends asking for the money,” the ED said.
