The case involved alleged extortion of high interest rates against micro personal loans given through mobile apps.
The Enforcement Directorate (ED) has attached over ₹51.22 crore lying in bank and virtual accounts of PC Financial Services Pvt Ltd (PCFS), taking the total seizure so far in a case related to alleged extortion of high interest rates to ₹ 288 crores. Against micro personal loans given through mobile apps.
The agency, which has taken the latest action under the Foreign Exchange Management Act (FEMA), is already probing several non-banking financial companies (NBFCs) and fintech firms under the Prevention of Money Laundering Act. They allegedly provided personal loans through mobile apps and threatened customers with high interest rates.
During the investigation, the ED had also started investigation under FEMA against PCFS. It was found that the company was a wholly owned subsidiary of Oplay Digital Services, SA de CV, Mexico, which was a wholly owned subsidiary of Opera Limited (Cayman Islands) and TenspotPesa Limited (Hong Kong), owned by Wisdom Connection Eye Holding Inc. . Cayman Islands). As alleged, the Cayman Islands-based entities were beneficially owned by a Chinese national, Zhou Yahui.
The parent company, PCFS, was established in 1995 by Indian citizens. It received an NBFC license in 2002 and after the Reserve Bank of India (RBI) approval in 2018, its ownership went to a “sugar-controlled” company.
The agency alleged that the foreign parent companies of PCFS invested 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 payment for software services received from the concerned foreigner. companies.
“PCFS also showed higher domestic expenditure of ₹941 crore … Most of the payments were made to foreign companies, which are related and owned by the same Chinese nationals who own Opera Group,” it said, adding that all service providers were The Chinese were chosen by the owners and the price was also fixed by them.
The exorbitant payments were allowed by dummy Indian directors on the instructions of the country’s premier, Zhang Hong, who reported directly to Zhou Yahui.
It is alleged that PCFS remitted foreign exchange of Rs 429 crore to 13 companies based in Hong Kong, China, Taiwan, the United States and Singapore for services and applications, which were available in India at a fraction of the cost.
The ED has accused PCFS of illegally remitting huge funds outside India for depositing money abroad under the guise of importing non-existent software and marketing services and keeping them in the accounts of related foreign companies.
Based on the agency’s findings, the RBI and the Income Tax Department have also started inquiries against the company.
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