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Enforcement Directorate Initiates New Raids on Fintech Companies Backed by Chinese Investors in Money Laundering Investigation

The Enforcement Directorate (ED) has initiated a fresh round of investigations targeting two companies allegedly connected to Chinese nationals involved in a money laundering saga rooted in lending practices through mobile applications. The raids, conducted on December 21 across 19 locations in Delhi-NCR, Chandigarh, Haryana, Punjab, and Gujarat, focused on Shinebay Technology India Private Limited (STIPL) and Mpurse Services Private Limited (MSPL), among others, purportedly “owned and controlled” by Chinese entities, as stated by the ED in an official statement.

The modus operandi highlighted by the ED reveals that these Chinese-owned fintech companies, in collaboration with non-banking financial entities and payment gateways, offered short-term loans via mobile apps, subjecting borrowers to exorbitant interest rates. The agency further alleged that borrowers faced harassment tactics, including unauthorized access to personal data, imposition of exploitative fees, systematic abuse, threats upon repayment failure, intentional data leaks, circulation of doctored images, and the dispatching of counterfeit legal notices.





ED unveils fresh raids on Chinese-backed fintech firms in money laundering  probe - BusinessToday
ED unveils fresh raids on Chinese-backed fintech firms in money laundering probe

The investigation also uncovered the deployment of “dummy” directors and local subscribers to operate on behalf of Chinese entities within India. According to the ED, Chinese nationals intricately constructed a network of fintech and non-banking entities in India, employing local professionals like chartered accountants, lawyers, company secretaries, and consultants to facilitate their operations.

The roots of this money laundering case trace back to police First Information Reports (FIRs) filed in Karnataka (Bengaluru police) and Telangana (Kazipet and Jangaon police).

During the recent searches, the ED seized approximately Rs 1.30 crore in cash, along with incriminating documents and digital records. This follows earlier action in June, where the agency conducted searches at multiple locations and seized bank deposits and fixed assets valued at Rs 19.43 crore.

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