Chinese Loan App Case: Mixed response of companies on ED raid, this is how fraud is executed

The ED said on Saturday that searches are being conducted at the premises of online payment platforms - Paytm, Razorpay and Cashfree in Bengaluru. The action has been initiated as part of an investigation into irregularities in lending by companies controlled by Chinese nationals. The ED said on Saturday evening that the search operation started yesterday at six premises of these companies in Bengaluru and is still going on

Mixed response from companies

Paytm declined to comment on the ED raid. A Razorpay spokesperson said that we are cooperating with the investigation and we have provided the KYC and other details to the agency. The officers were satisfied with the way we worked. Cashfree Payment said that we cooperated fully with ED. We follow PMLA and KYC guidelines in our dealings and will continue to do so. 

17 crore Rs seized

The ED has also seized the merchant IDs of these companies and an amount of Rs 17 crore deposited in the bank accounts during the raids. When a merchant sets up a payment profile, Google assigns that profile a unique digit code called a Merchant ID. 

Action after 18 FIRs

The ED said the money laundering case it is probing is based on 18 FIRs registered at the Bengaluru Police Cyber ​​Crime Station. These FIRs have been registered on charges of extortion and harassing people. People had taken small loans from Chinese payment companies through mobile apps, for which they had to be victims of harassment. 

In this way the fraud is executed

According to the ED, the addresses given by the Chinese companies to the Ministry of Corporate Affairs do not operate from there. Their addresses are fake.

These companies make them 'puppet directors' with fake documents of Indians, but they are controlled and operated by Chinese citizens.

These companies conducted illegal business using payment service platforms and merchant IDs or accounts linked to banks. 

People started committing suicide by taking loans, then ED started investigation

Since the start of the Corona epidemic in 2020, Chinese companies giving immediate loans are under the ED's target. People in different states of the country started committing suicide by taking loans from these companies.

Threats were given by companies

Police said that after giving loans, these companies used to threaten plain people to make their personal details public. To intimidate people, the agents of companies also used other tactics. Thereafter, the ED started investigation under the criminal section of the Prevention of Money Laundering Act (PMLA). These companies are also accused of getting personal details of borrowers while downloading the app. Their interest rate was also very high.