Delhi Fintech firm owned by Cayman Island group siphons Rs 500 crore black money to shell entities abroad.
The Income Tax Department has detected that a Fintech company with office and residential premises in Delhi and Gurugram has siphoned out Rs 500 crore in black money to its overseas group companies under the pretext of buying services over two years, according to a finance ministry statement issued on Wednesday.
The company is held by a group based in Cayman Island that is ultimately controlled by an individual of a neighbouring country, the statement adds.
“Evidence gathered during the search and seizure operation on the company’s premises has revealed that such remittances made to the group firms are either highly inflated or non-genuine. Evidence also indicates that internal web-based application for lending business was controlled from outside India,” the statement added.
The company has brought in India nominal initial capital by way of Foreign Direct Investment (FDI) but took substantial working capital loans from Indian banks. The business model of the company results in high rotation of capital which is evidenced by turnover of Rs 10,000 crore in its first year of operation.
During the search proceedings carried out on November 11, statements of key persons including foreign nationals have been recorded.
It was also found that the Fintech company, which is engaged in the business of providing instant short term personal loan through Mobile App, has been charging very high processing fees at the time of disbursement of loans. This results in a higher burden of compensation on the borrowers.
Further investigations in the case are in progress.