CHENNAI: Chennai policeman have arrested four people, including two Chinese citizensand discovered an extensive network of illegal microfinance applications offering instant loans at interest rates of up to 36%. According to law enforcement sources, more than two dozen illegal apps have been discovered that could have cumulatively disbursed Rs 300 million in sums ranging from Rs 5,000 to Rs 50,000 to more than one lakh of people across the country.
“The source of the money and to whom and how the principal and interest were returned is not known and is being investigated,” an official said. Two bank accounts with Rs 48 lakh and Rs 1.96 crore balance in ICICI Bank and the branches of RBL Bank in Bengaluru have been frozen by the police.
While two Chinese Nationals Xia Ya Mau, 38, and Yuvan Lun, 28, have been arrested, two others, Hong and Wandish, managed to escape to Singapore.
Two others from Karnataka S Pramoda from Doopanahalli and CR Pavan from Chikkanahally were also arrested and taken into judicial custody in Chennai. “Although the Karnataka duo were cited as ‘directors’ of many of these loan companies, they were paid 20,000 rupees as a monthly salary, while the Chinese took full possession of the check sheets, ATM debit cards and the credentials for accessing the company’s Internet banking, “said a senior official from the Central Crime Branch. A CCB team worked on the scam for 20 days and camped out in Bengaluru for about a week to catch the suspects.
The Chennai breakthrough came after the suicide of at least four men in Telangana and one in Bengaluru due to the shame and humiliation inflicted on them by the recovery agents hired by these loan application companies.
More than 100 hired in ₹8K / month to harass loan defaulters
At least five more Chinese nationals have been arrested in different parts of the country, including Delhi, in recent weeks.
Praising the CCB team, Chennai City Police Commissioner Mahesh Kumar Aggarwal said: “We are looking at the flow of money to the company, True Kindle Technologies Solutions Private Limited, that the Chinese bring in. The two arrested Chinese citizens have stayed even after the expiration of their visa period. ”
Another officer said they would hire a translator to question the suspects and obtain more information about their applications after taking them into police custody. Seized laptops and mobile computers will be examined.
The official said that CCB has sent requests to the Google Play Store to suspend 25 mobile applications as they are illegal and existed against investment and credit standards in the country.
Pramoda and Pavan told CCB detectives that they came across an online advertisement posted by the Chinese asking them to set up a call center in Bengaluru. “Their role was to register a company and recruit tele-callers, while the Chinese took care of the money part. Over 100 telephone operators were recruited at a monthly salary of Rs 8,000 and were assigned a target of at least 10 loan referrals per day. “His job was to make abusive phone calls to defaulting clients, accessing defaulters’ contact list and embarrassing them by sending messages to all of their contacts. The concept of microcredit applications became popular only after the Covid-19 lockdown went into effect in March 2020, ”said a CCB official.
After three of the clients caught in the debt trap committed suicide in a single month, Hyderabad police arrested a Chinese citizen and 15 other people and recorded 27 cases.
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