CHENNAI: The Enforcement Directorate (ED) has filed a charge sheet against seven Chinese nationals, three mobile loan app firms and one Chinese owned payments aggregator under the Prevention of Money Laundering Act (PMLA) at a special court in Chennai last month, sources said.
According to investigation by ED’s Special Task Force (STF) in New Delhi, the Chinese nationals hatched a criminal conspiracy to exploit thousands of vulnerable Indians by providing them short-term loans through mobile apps at a high rate of interest and processing fee in the year 2020. The cash were later recovered in an illegal manner by threatening and extortion by these companies and then siphoned off outside India through cryptocurrencies.
ED has identified at least Rs 141 crore of such proceeds of crime recovered from loan beneficiaries which were handled by these individuals and companies. The PMLA investigation was initiated based on multiple FIRs filed by Greater Chennai Police, Tamil Nadu police’s CB-CID, and police units of Bengaluru and Telangana based on complaints by loan beneficiaries alleging harassment and extortion by the Fintech companies for repayment.
The accused have been identified as Xiao Ya Mao, Wu Yuanlun, Hong Gaosheng, Peng Liu, Jianxing Zhang, Jianming Zhu and Yan Yan. The companies arraigned as accused are the Fintech firms Truekindle Technology of Gurugram, Toucolour Tech and Shinebay tech of Bengaluru and payment aggregator Mpurse services Private Ltd. Xiao Ya Mao and Wu Yuanlun were arrested by ED from Tiruchirapalli on November 13.
The Chinese individuals had forcibly made their Indian employees dummy directors of the Fintech firms and retain control with them, ED said.
The firms would strike a deal with Indian NBFCs by claiming to provide technological services. However, the firms themselves ran the operations of the app, injecting seed money using cryptocurrency, disbursing loans through the app, recovering it and then siphoning the proceeds outside India through cryptocurrency, ED said. The loans were disbursed through payment aggregators to beneficiaries wherein ED has found evidence of deceptive and manipulative tactics.
ED has also alleged that the Fintech companies connived with Chinese owned payment aggregator Mpurse to manipulate the software and enable illicit financial transactions without the knowledge of the NBFCs, ED said.
For instance, while loans were disbursed from a particular merchant id of the payment aggregator linked to the NBFC, the payments were collected from a different id. The aggregator did this to obscure the origin and destination of the illicit funds, ED said.