Enforcement Directorate attaches over Rs 76-cr assets to Chinese loan app cases


●What is the news ?

•The Enforcement Directorate (ED)has attached assets of over Rs 76 crore, including of some fintech companies "controlled" by Chinese nationals and fintech major Razorpay, as part of a money laundering probe against certain Chinese 'loan app' companies whose bullying tactics are alleged to have forced many debtors to end their lives during the stressful times of COVID-19.

•Numerous reports of blackmail and extortion by these "loan sharks" leading to death by suicide of gullible debtors were reported last year after the coronavirus infection and the resulting lockdown began in the country.This is the first case of criminal attachment of assets by the ED in these instances which is probing some other cases of this nature in other states too.

•The amount attached by the Enforcement Directorate (ED), the statement said, "pertains to seven companies out of which three are fintech (financial technology) companies namely Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited and Cloud Atlas Future Technology Private Limited which are controlled by Chinese nationals and three NBFCs (non banking financial companies) registered with RBI."


●Other Information

•The agency said its probe found that Chinese loan apps "offered loans to individuals and levied usurious rate of interest and processing fees."

•"The loan apps through their recovery agents resorted to systematic abuse, harassment and threatening the defaulters through call centers for coercive recovery of the loans by obtaining sensitive data of the user stored on mobilephones such as contacts, photographs and using them to defame or blackmail the borrower,".

This money-lending business being run by these fintech companies was illegal or "not authorised" under any law ,said by ED.

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