Assets worth more than Rs 252 crore of an Indian subsidiary of a Norwegian company "controlled" by Chinese persons have been ordered for confiscation in a FEMA probe against an "illegal" money lending mobile app named 'CashBean', the ED said on Thursday.
The Enforcement Directorate said an order, post adjudication, was issued on October 7 against PC Financial Services Pvt Ltd (PCFS) under the Foreign Exchange Management Act (FEMA) along with imposition of a penalty of more than Rs 2,146 crore against the said company.
PCFS is a subsidiary of Norway-based Opera Group.
The federal agency said in a statement that the "overall control" of PCFS was held with Chinese beneficial owners. It indulged in the business of lending money to the public in India through its mobile app 'CashBean', it said.
"Remittances of Rs 429.30 crore were made by PCFS to its related overseas group companies in the garb of 'Import of Software Licenses and Services' which were found to be bogus," it alleged.
The Reserve Bank of India, it said, had in February, 2022 found that PCFS was charging "usurious" rate of interest and other charges to its borrowers in an "opaque" manner apart from indulging in "unauthorized" use of logos of the RBI and the Central Bureau of Investigation for recovery from the borrowers in gross violation of the fair practices code.
The banking regulator cancelled the certificate of registration of the company (PCFS) and debarred it from acting as a non-banking financial institution, the ED said.
A seizure order for these assets worth Rs 252.36 crore was first issued by the agency in 2021 which was "confirmed" by the designated competent authority under FEMA in February, 2022.
PCFS filed an appeal against this order before the appellate forum and a final decision is pending, as per the ED.
However, the agency said it filed a FEMA complaint before the Adjudicating Authority in June, 2022 following which the latter issued a show cause notice to the company and they complied.
"However, one of the noticees Zhang Hong, the then country head of PCFS during the contravention period, neither replied to the show cause notice nor availed the opportunity of personal hearing," the ED said.
It added adjudication proceedings were recently completed and upon "careful examination" of the alleged violations levelled against the noticees vis-a-vis their written replies and submissions made during personal hearings, it has been found that the alleged FEMA violations have been "clearly proved".
"Accordingly, vide Adjudication Order dated 07.10.2024, properties worth Rs 252.36 crore of PCFS held in India and seized in terms of Section 37A of FEMA, have been ordered for confiscation, in addition to imposing penalty of Rs 2146,48,26,480," the probe agency said.
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