The Enforcement Directorate announced on Friday that it had filed an indictment against payment gateway Razorpay, three fintech companies controlled by Chinese nationals, and as many NBFCs and several others in a money laundering probe linked to Chinese lending apps that allegedly defrauded scores of people .
The Federal Bureau of Investigation said in a statement that the Bangalore-based Special Court of the Prevention of Money Laundering Law (PMLA) took note of the prosecutor’s complaint (indictment).
The indictment named a total of seven entities and five individuals as suspects.
The accused companies include fintech firms Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited and Cloud Atlas Future Technology Private Limited, which are “controlled” by the Chinese nationals, and three non-bank financial companies (NBFCs) registered with the RBI. named X10 Financial Services Private Limited, Track Fin-ed Private Limited and Jamnadas Morarjee Finance Private Limited.
Payment gateway Razorpay Software Private Limited was also named as a suspect in the indictment, the agency said.
ED’s money laundering case stems from several FIRs filed by Bengaluru Police CID based on complaints from various customers who had taken out loans and were “harassed” by the collections officer of these money lending companies.
According to ED, the investigation revealed that fintech companies had “an agreement with their respective NBFCs to disburse loans through digital lending apps.”
“The money lending business was actually run illegally by these fintech companies and these NBFCs knowingly let these companies use their names to get commissions without looking at their behavior. The same is also a violation of the Code of Fair Practices by the Reserve Bank of India,” the agency said.
The authority had previously issued two temporary attachment orders to freeze Rs.77.25 crore worth of funds held in bank accounts and payment gateways, which was later confirmed by the PMLA’s decision-making authority.
