700 Cases Against Chinese Firms Suspected of Economic Disruption                                                                                                                   

The Ministry of corporate Affairs (MCA) has registered over 700 cause across the country against companies with Chinese’s nationals as promoters and directors which recorded ‘ suspicious transaction ‘or dubious credentials’ the move followed intelligence inputs shared by the home Ministry that the firms were’ misused’ for various purposes, including’ evasion of taxes’ and ‘ money laundering’ according to government insiders. The cases have been registered by the Registrar of Companies (ROC) at local polies stations under various sections of the Indian Penal Code and the Information Technology Act. Maximum cases were registered in Delhi followed by Bengaluru and Mumbai.” While around 300 cases were registered in Delhi, over 200 were lodged in Bengaluru and 34 in Mumbai “a government insider privy to the development said. Following intelligence inputs, CA issued a two stage action plan.” The first stage was examinations of documents filed by the directors and the company and identification of fraudulent documents and prima facie fraudulent activities of the company,” an official said.” In the second stage, Rock filed Firs in police stations where the companies were located and official said Rock is required to complete the inquiry and submit reports to the ministry.” Each report requires to spell out the fraudulent activities, quantum of amount involved and other relevant findings, including non-compliances of companies Act and the LLP Act,” the official said Apart from MCA, law enforcement agencies like the Enforcement Directorate and the Department of Income Tax are also probing money laundering and suspected tax evasion based on intelligence inputs. “there is a suspicion that the firms are used as a vehicle for money laundering. The probe is undertaken to find the source and ultimate beneficiary of the money and if there is any political or economic connection,” another official said. In one of the probes, ED found fintech companies allegedly utilised own funds received from abroad, mainly from China, for giving loans at usurious rate of interest to unemployed youth and vulnerable security deposits equivalent to loan amounts granted by NBFCs to borrowers. On Wednesday, ED Provisionally attached assets worth 6.17 Crore deposited in various accounts/ merchant IDS of various fintech companies/ associated per sons maintained with various banks/ payments gateways, under the prevention of Money Laundering Act,2002.An ED Insider said the accused along with Chinese nationals allegedly opened companies in the name of various persons for illegal transactions, issuing loans and raising investments through mobile Apps like Cash Master Crazy Rupee, Cashing, Rupee Menu etc.” Notably, the companies were incorporated during Covid-19 at common add rises by active involvement of some Chinese nationals in connivance with Indian chartered accountants who helped in incorporation of the companies by using KYC documents of young Indian nationals in need of money. They were made directors/ shareholders in these companies,” ED alleged in a statement on Wednesday.                                                                                                                                                                                                                   

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