ED imposes Rs 2,100 crore fine on NBFC for loan app with Chinese links | India News – Times of India

HYDERABAD: The ED judiciary has imposed a fine of Rs 2,146 crore on PC financial services (PCFS), a non-banking financial company that is a loan app reportedly linked to Chinese and Norwegian entities, for Woman violations. This is the first time in India that an NBFC running a lending app has been hit with a huge fine, reports said.
The arbitration proceedings concluded on October 7 when the ED judicial bench attached PCFS’s properties worth Rs 252 crore in India. PCFS, a subsidiary of the Norwegian Opera Group, came under the ED lens after an investigation revealed that it was involved in lending money through mobile phones. app “CashBean”.
ED: China-affiliated NBFC has made Rs 429 crore illegal fund transfers
An ED official said, “After careful investigation of the alleged violations against the notices and their written submissions during personal hearings, it has been found that the alleged Fema violations are clearly proven.”
The investigation by ED’s Hyderabad unit into the company, which was allegedly under the control of Chinese owners, found that PCFS had made fraudulent transfers of Rs 429 crore to affiliated overseas group companies under the guise of importing software licenses and – services.
The investigation culminated in the seizure of several PCFS properties held in India through three seizure warrants issued in 2021.
The seizure orders were confirmed by the competent authority in February 2022, against which PCFS appealed to the Appellate Forum.
RBI had said two years ago in February, “PCFS was found to be charging extortionate interest rates and other charges to its borrowers apart from indulging in unauthorized use of RBI and CBI logos for recovery from borrowers in violation of the Fair Trade Code practices. ” RBI has canceled the registration of PCFS and debarred it from operating as an NBFC.
On June 21, 2022, a complaint was filed by ED in the judicial authority against PCFS and others under Fema Section 16, accusing them of violations of various provisions of the law.
A show-cause notice was issued the next day, followed by in-person hearings.
However, one of the persons served with a notice, Zhang Hong, then country head of PCFS during the violation period, did not respond to the notice or take up the opportunity for an in-person hearing.