FEMA ordered seizure of Rs 288 cr belonging to NBFC


FEMA‘s competent authority has “verified” the seizure of Rs 288 crore in money from a “Chinese-owned” non-banking financial corporation (NBFC) that reportedly harassed consumers by “misusing” their data after lending fast loans through mobile apps.

The Enforcement Directorate (ED) announced in a statement on Wednesday that the commissioner of customs in Chennai issued an order on February 4 confirming “the full seizure of the cash in the action launched against Chinese-owned P C Financial Services NBFC.”

Last year, the federal inquiry agency issued three different seizure orders under sections of the Foreign Exchange Management Act, seizing Rs 288 crore in cash held in the NBFC’s bank accounts and payment gateways (FEMA).

While investigating NBFCs and fintech companies under the anti-money laundering law (Prevention of Money Laundering Act), the ED launched a FEMA investigation into the company, which provided online instant micro-loans via mobile applications (apps) and then began “extorting high rates of interest by misusing the customers’ data and threatening and abusing them through call centers.”

A lot of people who were afflicted by the coronavirus-caused economic crisis took out these loans, and in some cases, persons were alleged to have committed suicide as a result of harassment by recovery agents employed by these companies.

The NBFC in this case was giving fast personal micro-loans for questionable international export transfers using its mobile application named ‘Cashbean,’ according to the ED.

Zhou Yahui, a Chinese national, is the ultimate beneficial owner of PCFS. According to the investigation, PCFS’ foreign parent companies brought in FDI (foreign direct investment) worth Rs 173 crore for lending and made foreign outward remittances worth Rs 429.29 crore to Chinese-controlled foreign-related companies in the name of payments for non-existent software services in a short period .

PCFS also revealed a “high domestic spending” of Rs 941 crore, according to the report.

It was discovered that “exorbitant” payments were made without due diligence by the dummy Indian directors of PCFS on the orders of the country head Zhang Hong, who reported directly to Yahui, a Chinese citizen, it added.

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