ED attaches assets worth Rs 19.39-cr of various entities in instant loan app case

ED's Hyderabad branch attached the properties under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 based on a case it initiated following 118 First Information Reports registered by Telangana Police under the provisions of the Indian Penal Code (IPC), 1860 and Information Technology Act, 2000 against as many as 242 instant loan mobile applications.

As per the financial probe agency, Fintech companies were running numerous loan apps and were charging very high processing fees, exorbitant interest rates and penal charges from the borrowers.

"The loan apps were being used for running non-banking finance business without valid licenses from Reserve Bank of India and government authorities or by using the licences of defunct, dormant and non-functional Non-Banking Financial Corporations," said the ED.

"While sanctioning the loans, all contact details, photos and personal data of the customers or borrowers were being taken through the loan apps," said the ED.

The agency further said that the data was then misused through tele-caller companies to recover outstanding loan amounts by abusing the borrowers as well as their family members and also by sending objectionable images of the borrowers to their contacts with derogatory remarks.

"The borrowers were also suggested to repay their existing loans by taking loans from other related loan applications resulting in the borrowers falling in debt traps," it said.

ED investigation revealed that certain mobile apps such as 'Online Loan', 'Rupiya Bus', 'Flip Cash', and 'Rupee Smart' were linked to Nimisha Finance India Private Limited (an NBFC) and Skyline Innovation Technology (India) Private Limited (fintech company having Chinese directors) and proceeds of crime were generated by lending business through these mobile apps.

Further, ED said Skyline entered into a Memorandum of Understanding with Rajkot Investment Trust Limited (RITL), an NBFC, for doing similar activity and in this process transferred proceeds of crime totalling Rs 20 crore to RITL.

However, it further said, that on account of the arrest of directors of Skyline by the Police and initiation of criminal proceedings, the amount of Rs 20 crore, which was Proceeds of Crime (POC) generated by Skyline, was not used by RITL for lending business or returned back to Skyline.

Instead, it said, RITL retained the POC and thereafter with an intent to conceal and layer the same, transferred the POC to the accounts of various related persons and entities controlled by them.

"A part of the proceeds of crime was also withdrawn in cash to obfuscate the trail of funds. The money trail done during PMLA investigation led to the attachment of these POC totalling Rs 19.39 crore in the bank accounts and fixed deposits of Nimisha Finance India Private Limited, Rajkot Investments Trust Limited, Mahananda Investment Limited and Baskin Management Consultancy Private Limited and others," the ED added. (ANI)