India’s financial crime agency raided the offices of fintech unicorns Paytm and Razorpay as well as Cashfree on Friday as part of an ongoing investigation into fraudulent Chinese lending apps, it said on Saturday. latest in a series of surveys in recent months.
The Law Enforcement Directorate said its raids on top Indian companies and companies controlled by Chinese personnel were prompted by 18 complaints lodged with the cybercrime police in Bengaluru. The complaints alleged the companies’ involvement in “extortion and harassment of the public who had benefited from a small amount of loans through the mobile apps”.
“During investigations, it emerged that these entities are controlled/operated by Chinese individuals. The modus operandi of these entities is to use fake Indian documents and make them bogus directors of these entities, they generate proceeds of crime,” the agency said. said in a press release (PDF).
“The said entities were found to be doing their suspicious/illegal activities through various merchant IDs/accounts held with payment gateways/banks,” the agency added.
Entities run by Chinese personnel were generating “proceeds of crime through merchant IDs/accounts held with payment gateways/banks”, the agency said. There were discrepancies between the addresses where they operated and what they disclosed to local authorities, the agency said.
The agency said it seized $2.13 million from entities controlled by Chinese personnel and that its investigation is ongoing.
The government agency has carried out more than half a dozen investigations into tech companies this year, including Chinese smartphone vendors Vivo, Oppo and Xiaomi, and seized more than $1 billion in capital. she said the companies evaded in fraudulent tax calculations.
Last week, he also raided the premises of CoinSwitch, a major local crypto exchange backed by Andreessen Horowitz and alleged that the Indian company had acquired over $200 million in shares in violation of local forex laws, a report said. reported TechCrunch earlier.
The Law Enforcement Branch also froze assets worth more than $8 million from WazirX last month, citing an alleged violation of exchange rules, and $46 million from the entity. local Vauld for facilitating “derived from crime” proceeds from predatory loan companies.
Indian authorities are cracking down on loan apps that charge exorbitant fees and use unethical means to collect payments. India’s central bank is moving forward with new guidelines for digital lending that will require companies to provide more disclosure and transparency for the benefit of consumers, as well as restrict several business practices.
Google said last month it had blocked more than 2,000 unethical loan apps in India this year.
“We have extended our diligent cooperation to ED operations, providing them with the required and necessary information on the same day of the investigation. Our operations and onboarding processes adhere to PMLA and KYC guidelines, and we will continue to do so in the time to come,” a Cashfree spokesperson said in a statement.