HYDERABAD: A division bench of the Telangana High Court set aside a single judge order, which had directed Enforcement Directorate (ED) to release Rs 15 crore from the seized amount belonging to PC Financial Services Private Limited which is behind instant mobile loan app companies.
When cases were filed against the firms for levying usurious rate of interest and processing fees and for harassment and threatening of defaulters through call centres for coercive recovery of loans, the ED also started probe and found that they had violated the Prevention of Money Laundering Act.
The ED said foreign parent companies of PC Financial Company brought in FDI worth Rs 172 crore for lending business and within a short period, made foreign outward remittances worth Rs 429.29 crore as payments for non-existent software services received from related foreign companies.
The company also showed high domestic expenditure of around Rs 900 crore. The ED found that exorbitant payment was allowed by the dummy Indian directors of the company without any due diligence and on instructions of the country head Zhang Hong, who reported directly to Zhou Yahuri of China.
The respondent remitted forex worth Rs 429,29,65,295 to 13 companies located in Hong Kong, China, Taiwan and Singapore in the guise of payments for license fee for Cash Bean mobile app. In consequence, the ED seized the properties of PC Financial Services Private Limited.
The company approached the High Court seeking release of the seized amounts for running its business and to pay salaries. Considering the plea, the single judge directed the ED to release Rs 15,35,45,317 within a week. The ED moved the division bench opposing this.
