After arresting at least four Chinese nationals for running the illegal apps, cops are now investigating the role of other Chinese.
In the latest incident, Cyberabad Police arrested three people in connection with instant personal loan applications on January 22.
Those arrested are Hemanth Kumar Jha, Director of Flash Cash Pvt limited, Gurugram, V. Manjunath, HR Manager at Juss IT Technologies Pvt LTD., Bengaluru and Abdul Lauk, Director/Team Leader at TGHY Trust rock Pvt. limited, Bangalore.
These arrests took place during the investigations into the suicide of a certain G. Chandra Mohan (38 years old). He had taken out loans of Rs 70,000 from 11 different applications. “He repaid Rs 2 lakh to these applications in installments but he was still being harassed for defaulting. This drove him to suicide,” said PV Padmaja, Deputy Commissioner of Police (Balanagar), Cyberabad.
Chandra Mohan, a supermarket worker, hanged himself on January 2 due to the alleged harassment.
Police found in their investigations that the three companies offered small loans through different apps on the Google Play Store and collected repayments through harassment and blackmail.
Hemanth developed applications with the help of a Michael from China and ran his office in Gurugram to maintain the customer database.
Police were also investigating the role of a Bhutanese national, who lives in India and is the director of a company associated with the disbursement of loans through the apps.
Surveys revealed that after providing loans to customers for seven days, companies used to divide customers into different categories and first collect repayment by calling them. In the next step, they were texting, then WhatsApp messages and followed by emails. The last method was to call customers’ relatives and defame them.
“To recover the loan from the clients, they practiced different methods depending on the dues. In case of higher dues, the treatment was very harsh, threatening and abusive. They also accessed the contacts of the relatives and friends of the clients and their sent WhatsApp messages defaming the defaulters,” the PCD said.
Companies charged an interest rate of 35% per annum from customers who repaid the loan amount on time and imposed huge penalties on defaulters. The harassment began shortly after the clients passed their due date.
Police also discovered that these apps were linked to non-bank finance companies (NBFCs). Police said notices will be sent to all NBFCs. The police also wrote to Google to take down the apps because of their criminal activities.
The modus operandi in this case is no different from other cases solved by the police over the past month.
More than 30 defendants, including four Chinese nationals, were arrested by police from Hyderabad, Cyberabad and Rachakonda, the three commissioners who cover Greater Hyderabad.
It was on December 4th that ES Yadav (23) from Narsapur in Medak district hanged himself, unable to bear the harassment of loan applications. He had taken out a loan of around Rs 6,000.
K. Mounika (28), an agricultural extension worker, committed suicide by consuming poison on 16 December. She had taken several loans from various apps to the tune of Rs 2.5 lakh.
On December 17, Sunil, a 29-year-old technician, hanged himself in Hyderabad. He had taken a loan of Rs 70,000 to 80,000 and he was asked to return more than Rs 2 lakh and when he could not repay, the app representatives defamed him by sending messages to all his contacts.
According to the Director General of Police, Mr Mahender Reddy, 50 cases have been registered in relation to instant loan applications.
The first arrests came on December 22 during a crackdown by Hyderabad and Cyberabad police on five call centers in Hyderabad and Gurugram.
Hyderabad Police arrested 11 people while Cyberabad Police caught six people in the multi-crore money lending racket.
Police said thousands of people across the country were targeted through instant loan apps after the lockdown.
“Call centers in Hyderabad employed 600 callers and in Gurugram there were nearly 500 callers, providing services to 30 money lending apps. These money lending app companies were operating illegally without tracking RBI guidelines and subjected people who borrowed money to harassment, forcing some of them to commit suicide,” Hyderabad Police Commissioner Anjani Kumar said.
It was on December 25 that the first Chinese was arrested in racketeering. Cyberabad Police Yi Bai alias Dennis from Delhi. He ran at least 11 such apps offering small loans at extremely high interest rates.
The main defendant is suspected to be another Chinese national, Zixia Zhang, who is currently in Singapore.
On December 27, Rachakonda police arrested three people, including Chinese national Liang Tian Tian. Parshuram Lahu Takve, his wife Liang Tian Tian and human resources manager SK Aaqib were arrested at the Pune call center.
The accused had entered into an agreement with four different finance companies in Mumbai and Mysuru for the collection of loans by setting up a call center in Pune.
According to Rachakonda Police Commissioner Mahesh Bhagwat, callers insulted customers in foul language and threatened them with dire consequences.
On December 30, Hyderabad police arrested two more people, including Chinese national Zhu Wei alias Lambo. The 27-year-old Chinese was picked up at Delhi airport minutes before boarding a flight to Frankfurt en route to Shanghai.
Lambo is said to be the head of four different companies operating seven call centers in Gurugram, Bangalore and Hyderabad.
Police believe that four companies run by the accused may have made 1.4 crore deals worth almost Rs 21,000 crore.
He would have been in contact with another Chinese national, Yuan Yuan alias Sissi alias Jennifer, who set up the operations in India but who is said to be in China.
On January 13, Rachakonda police arrested Chinese national He Jian and his Indian associate Vivek Kumar from Thane. Jian’s arrest came after Liang Tian Tian was interrogated.
The arrested Chinese reportedly revealed the names of at least five other defendants, all of Chinese nationality.
The instant loan app scam is not the first case in which Chinese people have been arrested. In October, Hyderabad police arrested Delhi’s Yah Hao for illegally operating betting apps and cheating Indians out of millions of rupees.
Investigators found a similarity between betting racketeering and lending apps, as both used Indians as fronts and relied on digital wallets to move money.