The federal polling agency had seized funds worth Rs 288 crore kept in NBFC bank accounts and payment gateways by issuing three separate seizure orders last year under sections of the foreign exchange management (FEMA).
The ED launched a FEMA investigation against the company as it investigated a number of NBFCs and fintech companies under the Prevention of Money Laundering Act that provided micro- online instant loans using mobile applications (apps), then began “extorting high interest by misusing customers’ personal data and threatening and abusing them through calls.”
A number of people affected by the economic crisis triggered by the coronavirus had taken advantage of these loans and, in some cases, people were said to have ended their lives following harassment by debt collectors delegated by these companies.
In this case, the NBFC was providing instant personal micro-loans through its mobile application called “Cashbean” for suspicious foreign remittances, the ED said.
“PCFS is ultimately owned by Chinese national Zhou Yahui. The investigation revealed that the foreign parent companies of PCFS brought in FDI (foreign direct investment) worth Rs 173 crore for lending business and in a short period of time, made foreign remittances worth Rs 429.29 crores to Chinese-controlled foreign companies, in the name of payments for non-existent software services,” the ED alleged.
PCFS also showed “high domestic expenditure” of Rs 941 crore, it said.
‘Exorbitant’ payments were found to have been blindly authorized by India’s bogus PCFS directors without any due diligence and on the instructions of the country’s leader Zhang Hong, who reported directly to Yahui, a resident of China, it said. -he declares.
“Therefore, PCFS violated FEMA provisions and equivalent assets were subject to seizure,” the agency said.
The ED said it had shared a report of this investigation with the RBI and the Department of Income Tax who “have also opened an investigation” against the accused NBFC.