The Enforcement Directorate Friday said it has filed a charge sheet against payment gateway Razorpay, three fintech companies controlled by Chinese nationals and as many NBFCs and some others in a money laundering probe linked to Chinese loan apps which allegedly cheated numerous people.
The federal probe agency said in a statement that the special Prevention of Money Laundering Act (PMLA) court based in Bengaluru has taken cognisance of the prosecution complaint (charge sheet). A total of seven entities and five individuals have been named as accused in the charge sheet.
The accused entities include fintech companies Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited and Cloud Atlas Future Technology Private Limited which are "controlled" by the Chinese nationals and three non-banking financial companies (NBFCs) registered with RBI named X10 Financial Services Private Limited, Track Fin-ed Private Limited and Jamnadas Morarjee Finance Private Limited.
Payment gateway Razorpay Software Private Limited has also been named in the charge sheet as an accused, the probe agency said. Razorpay sources said the payment gateway has been a "facilitator" in investigations against suspicious Chinese companies.
The platform has blocked all those suspicious entities and funds associated with them about one-and-half years ago and has shared their details with the ED on multiple occasions, Razorpay sources said. Being a regulated financial institution, Razorpay cooperates with law enforcement agencies and provides necessary merchant information to assist in the investigation process, they said.
The money laundering case of the ED stems from multiple FIRs of the Bengaluru Police CID which were filed based on complaints received from various customers who had availed loans and "faced harassment" from the recovery agent of these money-lending companies.
According to the ED, the probe found that fintech companies had "agreement with respective NBFCs for disbursement of loans through digital lending apps." "The money-lending business was being illegally run by these fintech companies actually and these NBFCs knowingly let these firms use their names for the sake of getting commission without being careful about their conduct. The same is also a violation of the fair practices code of the Reserve Bank of India," the agency said.
The agency earlier had issued two provisional attachment orders to freeze Rs 77.25 crore worth funds kept in bank accounts and payment gateways which was later confirmed by the Adjudicating Authority of the PMLA.