New Delhi: The Enforcement Directorate (ED) on Thursday seized funds worth around Rs 107 crore of a Chinese-controlled non-banking financial company (NBFC) for alleged infringement of foreign exchange giving instant personal loans on an internet-based app. was engaged in Law. The agency said PC Financial Services Private Limited (PCFS), an NBFC, was lying in bank accounts and virtual accounts on online payment gateways and which have been seized under the provisions of the Foreign Exchange Management Act (FEMA). The total amount seized is Rs 106.93 crore. The ED said the matter came under its radar during its ongoing money-laundering probe against several NBFCs and fintech companies that are linked to mobile applications providing instant personal loans. The agency said in a statement that these loans were being given with high interest rates and were recovered by illegally using personal data of customers and threatening and abusing them through call centres. The alleged illegality of these apps was reported from several states last year, especially following the economic stress caused by the lockdowns imposed to contain the spread of COVID-19, and prompted many to end their lives Was. Because of the extortion and bullying of these “suspicious” companies. In the latest case, the NBFC was giving such loans through a mobile phone app called “CashBean”. “PCFS is a wholly owned subsidiary (WOS) of Oplay Digital Services, S.A. de CV, Mexico, which in turn is the WOS of Opera Limited (Cayman Islands) and Tenspot Pesa Limited, Hong Kong owned by Wisdom Connection I Holding. (Cayman) Islands), which are eventually owned by Chinese national Zhou Yahui. “The parent Indian company, PCFS, was incorporated in 1995 by Indian nationals and obtained NBFC license in 2002 and after the approval of RBI in 2018, the ownership passed to the sugar-controlled company,” the ED said. The ED probe found that foreign parent companies of PCFS brought in foreign direct investment (FDI) of Rs 173 crore for the lending business and within a short span of time, made overseas outward remittances of Rs 429.29 crore in the name of software payments. Services received from related foreign firms. The agency said PCFS also showed higher household expenditure of Rs 941 crore. A “detailed” investigation revealed that most of the foreign expenses paid by the company were for foreign firms, which are related and owned by the same Chinese nationals who own the Opera Group, it claimed. “All the foreign service providers were chosen by the Chinese owners and the services were also priced by them. “The ED has found that exorbitant payments were allowed by dummy Indian directors of PCFS without due diligence and on the instructions of the country’s premier, Zhang Hong, who reported directly to Zhou Yahui, a resident of China,” the agency said. PCFS sent foreign exchange worth Rs 429 crore to 13 foreign companies based in Hong Kong, China, Taiwan, US and Singapore under the guise of payment of license fee for “Cashbean” app (Rs 245 crore per annum), software technology. fees (about Rs 110 crore) and online marketing and advertising charges (about Rs 66 crore), it alleged. The ED said all these services and applications are available at a “part” of the expenditure incurred by PCFS in India. “Moreover, all the customers of the NBFCs were in India and despite this, huge payments were made abroad and there is no evidence of receipt of service. “Also, during the same period, PCFS also booked household expenditure of similar amount under similar heads of expenditure,” it alleged. The agency alleged that the company’s management “failed” to provide any justification for these expenses and admitted that all remittances were to take money out of India and park it abroad in the accounts of group companies “controlled” by the Chinese promoter. were taken. Therefore, it was alleged that PCFS “illegally” remitted large sums of money outside India in the guise of importing non-existent software and marketing services, so as to deposit funds abroad and transfer them to the accounts of the foreign companies concerned. be kept, which violated FEMA. (Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.) .
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