Telangana: ED seizes Rs 252 crore from Chinese owned firm behind illegal loan app

Investigation culminated into an adjudication order dated October 7, 2024, based on three seizure orders passed during 2021.
ED logo used for representation
ED logo used for representation
Updated on
2 min read

HYDERABAD: The Hyderabad zonal unit of the Enforcement Directorate has seized properties worth approximately Rs 252.36 crore belonging to PC Financial Services Pvt. Ltd (PCFS), a subsidiary of Opera Group, Norway under the provisions of the Foreign Exchange Management Act (FEMA), 1999.

FEMA investigation revealed that PCFS, the overall control of which was held with Chinese beneficial owners, indulged in the business of lending money to the public in India through its mobile app known as “CashBean”. Huge amount of remittance to the tune of approximately Rs 429.30 crore was made by PCFS to companies run by its parent group overseas in the garb of import of software licences and services which were found to be bogus.

Investigation culminated into an adjudication order dated October 7, 2024, based on three seizure orders passed during 2021. This led to the seizure of various properties of PCFS held in India, aggregating Rs 252.36 crore, in terms of Section 37A of FEMA. The seizure orders were confirmed by the competent authority against which PCFS has filed an appeal before the appellate forum.

The Reserve Bank of India, in a release dated February 25, 2022, had observed that PCFS was found to be charging usurious rate of interest and other charges to its borrowers in an opaque manner apart from using its logo without authorisation as well as the logo of the Central Bureau of Investigation for recovery from the borrowers in gross violation of the Fair Practices Code. Subsequently, the RBI cancelled the certificate of registration of PCFS and debarred it from acting as a Non-Banking Financial Institution.

On June 21, 2022, a complaint was filed by ED before the adjudicating authority against PCFS and others, under Section 16 of FEMA, charging the firm with violating various provisions of the Act. The complaint included prayer to confiscate the properties of PCFS, following which a show cause notice was issued. However, the company did not reply to the show cause notice, following which the assets of the company were seized.

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