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New China Sponsored Scam Unearcthed By ED

New China Led Scam Unearcthed By ED

New China Led Scam Unearcthed By ED. (Image Credit: Journals of India)

What Is The Case?

The premises of the fintech companies like Paytm, Razorpay and cash-free were searched by the investigating agency Enforcement Directorate. There are allegations that the companies allowed the sale and purchase of money believed to be run by fraud companies having Chinese links, some of whom have also indulged themselves in illegal betting activities.

The investigating authority is probing the violation of RBI guidelines. According to reports, the investigating agency is probing the alleged favourable trade strategy implemented by the firm. Allegedly these companies used a large sum of money for their crypto investment, which is believed to be sent illegally abroad. As per the investigating agency, many such fraudulent companies after the beginning of the probe have decided to close their operations and leave altogether.

The investigating agency found the indulgence of Indian Chartered accountants and directors in floating numerous companies. Reportedly at a later stage, the Chinese officials visited India intending to take ownership of companies.

According to reports, the Chinese used local for opening bank accounts in HSBI the credentials of which were shared with the Chinese. Later acting on the instruction of the Chinese, many similar websites were set up. These websites lured people for betting. There is the allegation that money acquired through such processes was transferred to China using fintech companies like Paytm and Cashfree.

What Have The Fintechs Said In Defence?

Razorpay said that the firm is cooperating in the investigation by the agency and the investigating agency does not have any complaints on the same.  It acknowledged that few of its associates are under the lens of ED. Along similar lines, Cashfree also brought out that, it is not creating any obstacle in the investigation by the agency. It said that the company is proactively participating in the investigations.

Razorpay said via a statement: “A few of our merchants were being investigated by law enforcement about a year and a half back. As part of the ongoing investigation, the authorities requested additional information to help with the investigation. We have fully cooperated and shared KYC and other details. The authorities were satisfied by our due diligence process.”

Earlier Instances.

According to reports, this is not the first occasion where the RazorPay and Paytm have been found violating rules. According to the regulatory body, the liberal approach toward development led this development to flourish. As per reports, the investigating agency had decided to freeze a total of 47 crores belonging to a Chinese company in the year 2020 too. Reportedly, Alibaba has largely invested in Paytm.

 

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