The Enforcement Directorate (ED) announced the arrest of two Chinese nationals, Xiao Ya Mao and Wu Yuanlun, on 13 November 2024 in Tiruchirappalli. The arrests were made under the Prevention of Money Laundering Act (PMLA) in connection with a probe into digital loan applications operated by Chinese entities that allegedly provided short-term, high-interest loans through mobile apps.
The Sessions Court in Chennai has placed the accused under judicial custody until 29 November 2024, according to the ED.
The investigation began following complaints about loan apps charging exorbitant interest rates and processing fees—up to 30% of the loan amount—and using coercive methods to recover unpaid debts. The ED found that the accused had established two firms, Toucolor Technologies Private Limited and Truekindle Technology Private Limited, in 2020. Allegedly, they used Indian employees as proxy directors while maintaining control over operations from behind the scenes.
The companies disbursed loans ranging from ₹5,000 to ₹10,000 through mobile apps that required borrowers to share sensitive personal information, including access to contact lists, photos, and videos. Those unable to repay were allegedly forced to take additional loans, trapping them in a cycle of debt. Borrowers and their families were reportedly harassed using data obtained from their devices.
According to the ED, the two firms disbursed loans amounting to ₹49.2 crore, employing aggressive and illegal recovery tactics. The investigation also uncovered the use of cryptocurrency wallets to siphon funds. Cryptocurrency accounts created on the platform WazirX under the names of dummy directors reportedly received ₹3.54 crore through crypto transactions between August and December 2020. These funds were converted into cash and withdrawn in India before being transferred overseas.
The agency said a total of ₹5.02 crore collected from borrowers had been funneled out of the country via cryptocurrency wallets. An analysis of IP logs revealed that these wallets were accessed from Hong Kong.
ED, Hqrs. Office has arrested 02 Chinese Nationals namely Xiao Ya Mao and Wu Yuanlun on 13.11.2024 from Tiruchirappalli, Tamil Nadu under the provisions of the PMLA, 2002 in a case booked against digital loan Apps operated by Chinese Nationals. The Hon’ble Principal Sessions…
— ED (@dir_ed) November 19, 2024
(With inputs from The New Indian Express)
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