The Directorate of Enforcement (ED) has filed a prosecution charge before the Special PMLA Court in Bengaluru against seven organisations and five persons implicated in the Chinese Loan App case. The Complaint has been heard by the Hon’ble Court. The accused include three Fintech companies controlled by Chinese nationals, namely Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited, and Cloud Atlas Future Technology Private Limited, three NBFCs registered with the RBI, namely X10 Financial Services Private Limited, Track Fin-ed Private Limited, and Jamnadas Morarjee Finance Private Limited, and one payment gateway, Razorpay Software Private Limited. Previously, the ED filed two provisional attachment orders and attached Rs.77.25 crore from bank accounts and payment gateways in this case, which has been validated.
The ED launched an inquiry based on the multiple FIRs lodged by the CID in Bengaluru in response to complaints received from various consumers who had taken out loans and endured harassment from the collection agents of these money lending organisations.
The ED investigation found that Fintech businesses had agreements with various NBFCs for loan distribution via digital lending applications. During the inquiry, it was discovered that these Fintech firms are unlawfully running the money loan business, and these NBFCs intentionally allow these Fintech companies to use their names for the sake of commission without being concerned about the conduct of these Fintech companies. This is also a breach of the RBI’s Fair Practices Code. Further research is being conducted.
