Loan apps scam: ED seizes Rs 131 crore from Chinese-owned company

HYDERABAD:  The Enforcement Directorate (ED) officials, on Thursday, September 30, 2021, seized about Rs 131.11 crore lying in the bank accounts and virtual accounts with payment gateways belonging to PC Financial Services Private Limited, an NBFC, under the provisions of Foreign Exchange Management Act, in connection with the microloan apps cases. This was in continuation with the seizures in August. This will take the total seizure in this case to around Rs 238 crore. 

Investigations revealed that PCFS provided microloans through its mobile application ‘Cashbean’ for suspicious foreign outward remittances and it was a wholly-owned subsidiary (WOS) of Oplay Digital Services, SA de CV, Mexico, which was in turn a WOS of M/s Tenspot Pesa Limited, Hong Kong, owned by M/s Opera Limited (Cayman Islands) and M/s Wisdom Connection I Holding Inc (Cayman Islands), which are ultimately beneficially owned by Chinese National Zhou Yahui. The original Indian Company PCFS was incorporated in 1995 by Indian nationals and got NBFC license in 2002 and after RBI approval in 2018, the ownership moved to Chinese control.

The probe revealed that the foreign parent companies of PCFS brought FDI worth Rs 173 crore for lending business and within a short span of time, made foreign outward remittances worth Rs 429.29 crore in the name of payments for software services received from related foreign companies. PCFS also showed high domestic expenditure of Rs 941 crore. Further probe into the foreign expenses revealed that most of the payments were made to foreign companies, which owned by the same Chinese Nationals who own the Opera Group.