Tag: Enforcement Directorate (ED)

Enforcement Directorate seizes Rs 107 crore from Chinese loan app firm, BFSI News, ET BFSI

Personal Finance

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HYDERABAD: A Chinese-controlled instant loan app firm, PC Financial Services Private Limited (PCFS), was booked by the Enforcement Directorate (ED) for violating the Foreign Exchange Management Act (FEMA) and Rs 107 crore lying in its bank accounts seized on Thursday.

PCFS runs an instant mobile loan app ‘Cashbean’ and is accused of remitting money abroad for non-existent software and marketing services. ED is probing several NBFCs for money-laundering via instant micro loans on mobile apps. “PCFS is a wholly-owned subsidiary (WOS)of Oplay Digital Services, SA de CV, Mexico, which isa WOS of TenspotPesa Limited, Hong Kong, owned by Opera Limited (Cayman Islands) and Wisdom Connection | Holding Inc(Cayman Islands). The ultimate owner is Zhou Yahui, a Chinese. The original Indian company PCFS was incorporated in 1995, got NBFC licence in 2002 and after RBI nod in 2018 ownership moved to Chinese controlled firm,” the ED said.

While the foreign parent firms of PCFS brought in Rs 173 crore as FDI for lending business, within a short time the company made foreign remittances of Rs 429 crore for fake software services received from related foreign companies.

“PCFS also showed high domestic expenditure of Rs 941 crore. Most of its foreign payments were made to companies related/owned by Chinese who run the Opera group. The Chinese picked the foreign service providers and price,” the ED said.

According to ED officials, all PCFS payments were as ordered by country head Zhang Hong who directly reports to Zhou. PCFS sent Rs 429 crore to 13 foreign companies in Hong Kong, China, Taiwan, US and Singapore in the guise of payments for license fee for Cashbean mobile app (Rs 245 crore/ annum), software technical fee (about Rs 110 crore) and online marketing & advertisement fee (about Rs 66 Crore).

“All these services are available in India at a fraction of the cost incurred by PCFS. All its clientele are in India but huge payments were made abroad without proof of receipt. During the same period, PCFS also booked domestic expenditure of similar amount under the same heads. PCFS management failed to give any justification for these expenses and admitted all remittances were done to move money out of India to accounts of group companies controlled by the Chinese promoter,” the ED said.



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Rana Kapoor files recall application against court’s order allowing ED to question him, BFSI News, ET BFSI

Banking & Finance

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A special court here has permitted the Enforcement Directorate (ED) to question arrested banker Rana Kapoor in a money laundering case.

The said case pertains to a loan taken by Oyster Buildwell Pvt Ltd, a holding company of Avantha Realty Limited from Yes Bank Ltd )YBL), and its alleged misappropriation between 2017 and 2019.

The ED had registered a money laundering case based on the predicate offence registered by the Central Bureau of Investigation (CBI) against Kapoor, his wife Bindu Kapoor and promoter of Avantha group, Gautam Thapar for “illegal gratification in lieu of favours extended in connection with official work”. The agency has pegged the loss caused to the bank at Rs.466.51 crores.

While on August 20, the court allowed the federal agency plea to interrogate Kapoor between August 25 and August 27at the Taloja Central Prison, the promoter of Yes Bank Ltd Monday filed an application to recall the order on the ground of not being heard,

Advocate Vijay Agarwal along with Advocate Ayush Jindal appeared for Kapoor, in the said matter. “..in view of the fact that the accused had not been afforded an opportunity to be heard which is directly in contravention with his fundamental rights and as principles of Natural Justice were not obeyed,” Kapoor’s counsels contested.

They also pleaded that Kapoor be interrogated only under audio-visual surveillance and in the presence of his legal representatives.

The ED has contested the application. The court has adjourned the matter for arguments.



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SBI-led consortium raises Rs 792 crore by sale of Vijay Mallya’s UB shares, BFSI News, ET BFSI

Banking & Finance

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A consortium of banks led by the State Bank of India on Friday realized Rs. 792.11 crore by sale of shares in the bank loan fraud case involving Kingfisher Airlines and its former owner and fugitive economic offender Vijay Mallya.

These shares were handed over by the Enforcement Directorate (ED) to the consortium of banks.

Earlier SBI led consortium had realized Rs. 7181.50 crore by liquidating assets handed over to SBI led consortium by ED, the agency said in a press statement on Friday.

In addition, Rs. 1060 crore worth asset has been allowed to the banks by Fugitive Economic Offense Court in PNB/ Nirav Modi Case & Rs. 329.67 Crore has been confiscated by ED under provisions of Fugitive Economic Offenders Act, the agency added.

On July 1 Purvi Modi (sister of Nirav Modi) transferred Rs. 17.25 crore from proceeds of Crime from her foreign bank account to ED.

Few days back, ED has further handed over assets worth Rs. 3728.64 Crore to the SBI led consortium including shares of Rs. 3644.74 Crore, Demand Draft of Rs. 54.33 Crore and immovable properties worth Rs. 29.57 Crore.

The statement issued by the agency further added that Vijay Mallya, Nirav Modi and Mehul Choksi have defrauded Public Sector Banks by siphoning off the funds through their companies which resulted in total loss of Rs.22,585.83 Crore to the banks.

Till date ED has transferred assets worth Rs. 12,762.25 Crore to the Public Sector Banks and confiscated assets of Rs. 329.67 Crore. ED had also recovered Rs. 17.25 Crore from Purvi Modi. As on date, assets worth 58% of total loss to the banks have been handed over to Banks/confiscated to government of India.

The agency claimed that till date it has attached/seized assets of Rs. 18,217.27 Crore under the provision of Prevention of Money Laundering Act (PMLA).



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YES Bank: ED raids Omkar Realtors in money laundering case

Banking & Finance

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The Enforcement Directorate on Monday conducted raids on at least 10 premises of a Mumbai-based realty group in connection with its money laundering probe in the YES Bank alleged bank fraud case, official sources said.

They said premises of Omkar Realtors and Developers, that includes seven residential and three official in Mumbai, were searched by the central probe agency.

Emails sent by PTI to the realty group did not elicit a response. The action is being carried out under the Prevention of Money Laundering Act (PMLA) and the raids are aimed at gathering more evidence, they said.

Also read: Cox & Kings: A tale of plunder

The Omkar Group is promoted by its chairman Kamal Kishore Gupta and Managing Director Babulal Varma, they said.

The group is alleged to have misused various permissions given under the slum rehabilitation authority (SRA) schemes and is alleged to have “diverted” around ₹450 crore taken by way of loan from YES Bank, ED sources said.

YES Bank co-promoter Rana Kapoor and and DHFL promoters Kapil Wadhawan and Dheeraj Wadhawan were arrested in this case by the ED last year and they are in judicial custody at present. The ED had booked Kapoor, his family members and others under the PMLA after studying a CBI FIR that alleged that dubious multi-crore loans were given by YES Bank to various entities in contravention of the law and in lieu of purported kickbacks given to the Kapoor family.

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