Chinese firms under corporate affairs ministry scanner
Indian authorities have been cracking down on entities that are operating loan apps illegally and the ministry has also been acting against companies and related individuals for hiding beneficial ownership.
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NEW DELHI: The corporate affairs ministry is probing various Chinese companies, especially those with links to loan apps, for alleged violations and some of the investigations are at an advanced stage, according to a senior official.
In recent times, Indian authorities have been cracking down on entities that are operating loan apps illegally and the ministry has also been acting against companies and related individuals for hiding beneficial ownership.
The senior official said enquiries by the ministry are going on against various Chinese companies, especially those linked to loan apps, and some of the enquiries are at an advanced stage.
The ministry, which is implementing the companies law, is mainly looking at whether frauds have been committed at these companies and some of the cases are being probed by the Serious Fraud Investigation Office (SFIO), the official said.
Further, the official said that the ministry receives complaints from the Reserve Bank of India (RBI) and the Ministry of Electronics and Information Technology (MeitY), among other entities, following which enquiries are initiated against the companies concerned.
While it is sometimes difficult to track the funding sources for some companies, the official said efforts are made to ascertain beneficial ownership.
In January, the Registrar of Companies (RoC), NCT (National Capital Territory) of Delhi, and Haryana slapped penalties totalling more than Rs 21 lakh on an Indian company and its related individuals as well as entities.
The move was part of cracking the whip for hiding the beneficial ownership links to a Chinese group.
On February 6, the finance ministry informed Parliament that Google has suspended or removed more than 2,200 fraudulent loan apps from its Play Store between September 2022 and August 2023.
The government is constantly engaged with the RBI and other regulators and stakeholders concerned to control fraudulent loan apps.
RBI has issued regulatory guidelines on digital lending, which aim at firming up the regulatory framework for digital lending while enhancing customer protection and making the digital lending ecosystem safe and sound.