Crime
ED arrests one in Rs 2,200 crore PMLA case
The Enforcement Directorate (ED) on Saturday said that it has arrested Pavitra Pradip Walvekar, the promoter director cum CEO of Kudos Finance and Investment Private Limited, an NBFC company in connection with a prevention of money laundering case.
His arrest was made at Hyderabad by a team of ED officials. The probe agency produced him before a special court and said that he wasn’t needed for further interrogation. After this the court remanded Pavitra to 15 days judicial custody.
The ED has been conducting money laundering investigation against a number of Indian NBFC companies which are in the business of instant personal loans via mobile apps.
The ED has found that various fintech companies backed by Chinese funds have made agreements with these NBFC companies for providing instant personal micro loans of term ranging from 7 days to 14 days.
Ms Kudos NBFC ‘purportedly’ engages FinTech (digital lending partners) Companies as a Service Provider to assist in identifying prospective customers, verifying their eligibility, collection of information/documents, conducting due diligence, collecting pre-disbursement documents, arranging execution of the loan agreement, assisting with collections and recovery of principal and interest payments and attending service requests/product related queries for the retail loans offered by the Company.
Although it is projected that the NBFC is engaging Fintech companies for the above activities, but in reality they are allowing the Fintech companies to misuse the valuable NBFC license of Kudos.
“Ms Kudos has a paltry Net Owned Fund (NOF), but it is taking huge amount as ‘security deposits’ and then opening separate Merchant ID (MID) with payment gateways for each fintech app and then depositing this security in the MID of the respective fintech app,” said an ED official.
Kudos company has no mobile app of its own. It is not involved in the lending business at all. It has miniscule staff and is blindly allowing fintech companies to operate at the back of MOU between self (NBFC) and Fintech Mobile app companies. Thus, the entire lending operation is being done by the fintech app from its own funds. Kudos is only lending its license and the fintech apps are the ones acting like the real NBFCs and doing end to end micro lending and reaping majority of the benefits. In return Kudos is taking a commission without doing any due diligence or hard work.
“Entire decisions regarding fixation of interest rate, processing fee were taken by fintech companies and these companies were operating on the basis of instructions from Chinese beneficial owners. They capture customers’ data by getting access to their mobile contacts, media. In order to obtain more profits and to maintain high recovery rate, their call centres resorted to harsh recovery measures by using abusive language to entire phone list and contacts and misuse of social media privileges. Unable to bear the level of harassment, certain people have committed suicides,” said an ED official.
The official said that at the time of crediting the loan amount, the apps would deduct 15-25 per cent of the amount as processing fee and on the remaining amount they were charging very high interest rate.
“Fund trail investigation done by ED revealed that despite having NOF of only Rs 10 crore, Kudos circulated loans over Rs 2,200 crore in its name and it was entirely funded by 39 fintech companies who are now not responding to summons and have shutdown their operations and are absconding,” said the ED official.
In the entire business, fintech companies have gained a total profit of around Rs 544 crore and Kudos has gained a profit of around Rs 24 crore.
This entire arrangement is in complete violation of the RBI guidelines on NBFCs and thus, the entire profit of Rs 568 crore is nothing but proceeds of crime.
The source of funds with the fintech companies is also suspect and is being investigated.
Despite repeated opportunities, Pavitra Pradip Walvekar was not revealing the real identity and beneficial owners of the 39 apps with whom they were in business for more than a year.
The ED has alleged that instead of cooperating with the investigation, he had been making active attempts to obstruct the free and fair investigation.
Crime
Patna court stays arrest of Khan Sir in coaching centre firing case

Patna, June 9: A Patna court on Tuesday granted interim relief to popular educator Faisal Khan, widely known as Khan Sir, by staying his arrest in connection with the recent coaching centre firing case.
The District Judge’s court pronounced its order on Tuesday after reserving its verdict on Khan Sir’s anticipatory bail plea following a hearing on Monday.
While the court has not yet granted anticipatory bail, it has directed the police not to take any coercive or punitive action against him until further proceedings.
The court has also sought the case diary and details of Khan Sir’s criminal history from the investigating agency. The matter will now be heard again on June 30.
Seeking the case diary and the accused’s criminal record is a routine judicial procedure while considering an anticipatory bail application.
Although the bail plea remains pending, the stay on arrest has provided major relief to Khan Sir, who had been facing the possibility of immediate police action.
After the court order, Khan Sir’s counsel, Advocate Arvind Kumar Mahuar, told media that Khan Sir is now free to move around wherever he wants as the court has given him protection from the arrest.
The case stems from an incident that occurred on the night of June 2, when unidentified individuals allegedly attacked Khan Global Studies, the coaching institute run by Khan Sir in Patna.
Following the incident, police arrested Roshan Anand, the owner of Gyan Bindu Coaching Institute, and sent him to judicial custody.
The controversy intensified after a video surfaced showing two security guards allegedly firing shots into the air outside the coaching institute during the attack.
The police subsequently arrested both guards and lodged a case against them. Later, Khan Sir was also named in the case.
Police registered an FIR against Khan Sir under provisions related to attempted murder and the Arms Act. Since the registration of the case, he had reportedly remained out of the police’s reach.
Law enforcement officials had visited his coaching institute in an attempt to apprehend him, but he was not found there.
Crime
CBI court sentences firm partner to three years RI in Rs 4 crore bank fraud case

Chandigarh, June 5: A Special CBI Court in Mohali, Punjab, has convicted and sentenced Samir Dua, a partner of M/s G.D. Ispat Udyog, Mandi Gobindgarh, to three years of rigorous imprisonment (RI) along with a fine of Rs 15,000 in connection with a multi-crore bank fraud case, an official statement said on Friday.
The sentence was pronounced on June 4, following the conclusion of trial proceedings in the case investigated by the Central Bureau of Investigation (CBI).
According to the CBI, the case was registered against Dalip Dua and Samir Dua, partners of M/s G.D. Ispat Udyog, along with other accused, for allegedly entering into a criminal conspiracy to defraud Indian Overseas Bank’s Mandi Gobindgarh branch in Punjab.
The investigation revealed that the accused had fraudulently secured a cash credit limit of Rs 4 crore from the bank by submitting false and fabricated information and documents.
The loan facility was allegedly obtained through misrepresentation, causing a wrongful loss to the bank and corresponding unlawful gain to the accused, the agency said.
Following a detailed investigation, the CBI filed a charge sheet against the accused persons before the competent court. During the trial, the prosecution presented evidence establishing the fraudulent nature of the transactions and the conspiracy behind obtaining the credit facility.
After examining the evidence and hearing the arguments, the Special CBI Court found Samir Dua guilty and sentenced him to three years of rigorous imprisonment. The court also imposed a monetary penalty of Rs 15,000.
Proceedings against co-accused Dalip Dua were abated due to his death during the pendency of the case.
The conviction marks the culmination of the CBI’s investigation into the bank fraud, underscoring the agency’s efforts to prosecute financial crimes and hold those responsible for defrauding public sector banks accountable.
Crime
NCB seizes 406 kg ganja, arrests 4 accused in UP’s Gorakhpur

Gorakhpur, June 4: The Narcotics Control Bureau (NCB) seized 406 kg of ‘ganja’ (contraband substance) in Uttar Pradesh’s Gorakhpur and arrested four accused who were taking the contraband to Deoria from Tezpur in Assam, an official said on Thursday.
The NCB Gorakhpur Zone, in coordination with the Uttar Pradesh Special Task Force (STF), achieved the breakthrough when they arrested two persons on Wednesday, a statement said.
Acting on specific intelligence, NCB Gorakhpur intercepted a pickup van on the Salempur–Lal Bazar Main Road in Deoria and seized 202 kg of ganja concealed in the vehicle, the statement added.
During the follow-up investigation, NCB teams conducted further operations in Barhaj town of Deoria, resulting in the recovery of an additional 204.8 kg of ganja and the arrest of two more accused, it said.
With two separate recoveries, the total seizure by the NCB and Uttar Pradesh STF totalled 406.8 kg of ganja, it added.
The four accused were charged with offences under the relevant provisions of the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985.
The NCB said that investigation was underway to identify and apprehend other persons involved in the trafficking network and to ascertain the forward and backward linkages of the contraband.
In a separate operation in Maharashtra earlier, the NCB arrested two drug traffickers and recovered 702 kg ganja while busting a major interstate trafficking network in Gondia, an official said.
“The 702 kg ganja was concealed in 100 packets among grocery cargo items, including detergent, toothpaste and hair dye, was recovered and seized,” the official said in a statement.
The seized contraband was sourced from Odisha and destined for multiple Maharashtra-based drug syndicates operating in Nagpur, Gondia, Pune and Mumbai.
In another case, the NCB secured jail terms in a Mumbai court for five drug traffickers, including the kingpin, in a synthetic drug trafficking case.
The convicts were sentenced to imprisonment ranging from 15 years to one year, a statement added.
The Special NDPS Court in Thane sentenced the kingpin Mohammed Arif Yaqoob Bhujwala, a resident of Mumbai’s Chinchbunder, to 15 years’ imprisonment, along with a fine of Rs 2 lakh, the NCB’s Mumbai Zonal Unit said.
“Parvez Khan alias “Chinku Pathan” and Mohammed Salman Khan, both residents of Chinchbunder, along with Vikrant Jain, a resident of Bhiwandi in Thane, were awarded five years’ imprisonment each and fined Rs 50,000 each,” the NCB added.
“Haris Faizullah Khan, resident of Bandra West in Mumbai, was sentenced to one-year imprisonment, along with a fine of Rs 10,000,” it said.
The NCB investigation led to freezing of two movable and three immovable properties worth more than Rs 1.5 crore belonging to Parvez Khan alias Chinku Pathan.
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