ED Screws On Chinese-owned Financial Company

ED screws on a Chinese-owned financial company, seized Rs 288 crore after taking action, accused of misuse of personal data.

ED has seized Rs 288 crore from a Chinese-owned  (NBFC) for harassing borrowers by misusing their personal data to provide instant loans through mobile apps and subsequent recovery.

This action was taken under the Foreign Exchange Management Act (FEMA).

In a statement issued on Wednesday, the Enforcement Directorate (ED) said that an order was issued by the Commissioner of Customs, Chennai on February 4.

The order confirmed the charges against Chinese-owned PC Financial Services (PCFS) In the action taken, his entire fund was confiscated.

The central probe agency has seized Rs 288 crore deposited in bank accounts and payment channels of NBFCs through three attachment orders issued last year under FEMA.

The ED had initiated a probe under the Prevention of Money Laundering Act (PMLA) against several NBAFCs and fintech companies for providing instant loans through mobile apps.

It was alleged that these companies used to collect personal data of borrowers through the app and misuse them to recover high interest.

The borrowers were abused and threatened through the call center. In this sequence, the name of PCFS also appeared.

The ED said the company used to provide small loans through the mobile app CashBean for dubious overseas payments.

ED screws on a Chinese-owned financial company: The central agency said, ‘PCFS is owned by Zhou Yahui, a resident of China.

The investigation found that foreign parent companies of PCFS brought in foreign direct investment (FDI) worth Rs 173 crore to lend to people in a short span of time.

Thereafter, the company paid Rs 429.29 crore to foreign companies controlled by China in the name of software services that did not exist.

Not only this, PCFS also showed a household expenditure of Rs 941 crore.

The investigation found that unaccounted payments were made to the dummy Indian directors on the instructions of the company’s country head Zhang Hong.