The Enforcement Directorate on Friday said it has indicted payments portal Razorpay, three fintech companies controlled by Chinese nationals and as many NBFCs and some others in a money-laundering probe linked to Chinese loan apps that claims they have defrauded many people.
The Federal Investigation Agency said in a statement that the Bengaluru-based Special Prevention of Money Laundering Court (PMLA) has taken cognizance of the prosecution’s complaint (chargesheet).
A total of seven legal entities and five individuals are named as defendants in the indictment.
The accused persons include fintech companies 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-banking 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 is also named in the charge sheet as an accused, the agency said.
The ED money laundering case stems from multiple FIRs of the Bengaluru Police CID that were filed based on complaints received from various customers who availed loans and were “harassed” by the recovery agent of these lending companies.
According to the ED, the probe found that the fintech companies had “an arrangement with the respective NBFCs to disburse loans through digital lending apps”.
“The lending business was actually illegally run by these fintech companies and these NBFCs knowingly allowed these firms to use their names for the purpose of getting commission without paying any heed to their conduct. So is the violation of the Fair Practices Code of the Reserve Bank of India,” the agency said.
The agency had earlier issued two interim attachment orders to freeze funds worth Rs 77.25 crore held in bank accounts and payment gateways, which was later upheld by the PMLA adjudicating authority.