Hyderabad
The Enforcement Directorate on Tuesday said that the competent authority under FEMA, Commissioner of Customs, Chennai, has confirmed the full seizure of ₹288 crore by the agency against Chinese owned M/s PC Financial Services NBFC, by passing a speaking order on February 4.
ED had seized bank/payment gateway funds worth ₹288 crore of M/s PC Financial Services Private Limited (NBFC) vide 3 Seizure orders issued under the provisions of the Foreign Exchange Management Act, 1999 (FEMA). The orders were issued on August 26, 2021, September 30, 2021, and December 15, 2021, for amounts of ₹106.93 crore, ₹131.11 crore and ₹51.22 crore respectively.
The agency is investigating a number of NBFCs and Fintech companies under PMLA 2002 for providing instant online micro-loans using mobile applications (APPs) and then extorting high rate of interest by misusing the personal data of the customers and threatening and abusing them through call centres.
During the course of the money-laundering investigation, the ED also initiated an investigation under FEMA against PCFS, an NBFC company, that provides instant personal micro loans through its mobile application ‘Cashbean’ for suspicious foreign outward remittances. M/s PCFS is ultimately beneficially owned by Chinese National Zhou Yahui.
The investigation further revealed that the foreign parent companies of PCFS brought in FDI worth ₹173 crore for lending business and within a short span of time, made foreign outward remittances worth ₹429.29 crore to Chinese controlled foreign-related companies, in the name of payments for non-existent software services. PCFS also showed a high domestic expenditure of ₹941 crore.
ED has found that exorbitant payments were blindly allowed by dummy Indian directors of PCFS without any due diligence, on the instructions of the country head Zhang Hong, who directly reported to Zhou Yahui, a native of China. “Hence, M/s PCFS had contravened FEMA provisions and equivalent assets were liable for seizure and seizure orders were issued,” officials said.
Further based on the investigation by ED, RBI and IT department have also initiated enquiries against the said PCFS.
