ED seizes Rs 1.3 cr in 19 raids on China-backed fintech firms in India

Earlier search operations had resulted in the recovery of incriminating documents and assets totalling Rs 19.43 crore

The Directorate of Enforcement (ED) stated that it had conducted 19 raids across locations in Delhi NCR, Chandigarh, Haryana, Punjab, and Gujarat as part of a money laundering case against firms in India that are backed by Chinese nationals. The enforcement agency has seized various incriminating documents and digital records and Rs 1.3 crore in cash.

The raids, conducted on December 21, 2023, were a part of an ongoing investigation against Shinebay Technology India Private Limited (STIPL), Mpurse Services Private Limited (MSPL), among others, the ED stated on Wednesday.

The ED had initiated an investigation based on First Information Reports (FIRs) against several companies and individuals in Bengaluru, Kazipet, and Jangaon. Police complaints were filed under various sections of the Indian Penal Code (IPC), 1860, and IT Act, 2000.

These companies had been accused of charging excessively high-interest rates on loans and harassing customers through threats and abuse over the phone.

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The ED report stated that these companies were also "engaging in deceptive and unethical practices like accessing the borrower's photo gallery and phone contact list without authorisation, levying exploitative rate of interest and processing fee, resorting to systematic abuse and threatening in case of failure of repayment by the borrower, intentional leaking of borrowers data, circulating morphed photographs of the borrower to its contacts, sending fake legal notices, etc."

Fintech companies, non-banking financial companies (NBFCs), and payment aggregators/gateways, owned and controlled by Chinese nationals, collaborated to provide online short-term instant loans, exploiting borrowers with high interest rates and engaging in unethical practices.

The investigation revealed a complex web of Chinese-controlled entities operating in India through dummy directors and subscribers.

Earlier search operations, conducted on June 14, 2023, at six locations, resulted in the recovery of incriminating documents and assets totalling Rs. 19.43 crore. Further investigation is under progress.