NEW DELHI: In a first for an Indian non-banking financial company (NBFC), the Enforcement Directorate (ED) has imposed a significant penalty of Rs2,146 crore on PC Financial Services (PCFS) for allegedly operating a loan app with links to Chinese companies.
The fine stems from violations of the Foreign Exchange Management Act (FEMA), according to the adjudicating authority of the ED.
The investigation revealed that PCFS had connections to both Chinese and Norwegian entities.
The company’s money-lending operations in India were conducted via a mobile app called “CashBean.” The probe further uncovered that Chinese owners held overall control of the NBFC’s operations.
Key finding
A key finding in the ED’s probe was the transfer of approximately Rs430 crore by PCFS to foreign entities under the pretext of ‘importing software licences and services.’ This transaction was deemed “bogus” by the investigating officials.
Following the probe, the ED seized PCFS’s Indian assets worth Rs252.36 crore on October 7. The adjudication process was completed after a thorough examination of the charges, during which the noticees were given the opportunity to respond and present their case in personal hearings.
In a statement, the ED adjudicating authority noted, “Upon careful examination of the alleged violations and the replies and submissions from the noticees, the FEMA violations have been conclusively proven.”
