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ED arrests one in Rs 2,200 crore PMLA case

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 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

Tiger Shroff firing case: Three suspects to be taken to Mumbai from Kota under tight security

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The three suspects held in connection with the firing incident involving Bollywood actor Tiger Shroff in Mumbai will be taken to Mumbai, Maharashtra, by the Mumbai Police on Tuesday. The suspects were kept overnight in the lock-up of the Kota Railway Colony police station in Rajasthan under tight security amid concerns over their possible escape.

As a precautionary measure, commandos and armed personnel were deployed at the police station.

The entire CCTV surveillance network of the police station was connected to a command centre to ensure continuous monitoring of the suspects and strengthen security arrangements.

City Superintendent of Police Tejaswini Gautam also visited the Railway Colony police station late Monday night to review the security arrangements. The Mumbai Police had earlier postponed the transfer of the suspects from Kota due to security concerns.

The three remained in custody throughout the night under heightened surveillance.

According to the police, the three suspects were apprehended by Kota Police at the railway station on Monday in connection with the firing incident involving actor Tiger Shroff’s car in Mumbai. The suspects were travelling on the Pune-Jaipur train (12939) and were found sitting at different locations in a general coach.

Their movements and travel plans allegedly indicated that they were attempting to evade arrest after the incident. Investigators believe the suspects had planned to reach Jaipur by train, travel onward to Delhi by bus and then escape to Nepal. However, Kota Police intercepted them at the railway station before they could proceed with their alleged plan.

Following their apprehension, the suspects were taken to the Railway Colony police station, where security was significantly tightened in view of the sensitivity of the case and the possibility of an escape attempt.

The Mumbai Police are scheduled to leave Kota with the three suspects on Tuesday for further investigation into the firing incident. The transfer is expected to enable investigators to question them further and establish their alleged roles in the case.

The deployment of armed personnel, enhanced CCTV monitoring, and the presence of senior police officials underline the security measures adopted by Kota Police while the suspects remained in custody.

Further details about the investigation and the circumstances surrounding the firing incident are expected to emerge as the Mumbai Police proceed with the case.

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Crime

Suspicious passenger apprehended at Delhi Jama Masjid Metro Station after trying to flee during screening

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Alert personnel of the Central Industrial Security Force (CISF) apprehended a passenger at Delhi’s Jama Masjid Metro Station after he allegedly attempted to flee when a suspicious object was detected during his baggage screening.

According to the CISF, the incident came to light when the passenger’s baggage was being screened through an X-ray Baggage Inspection System (XBIS). During the examination, personnel noticed a dense and suspicious object on the scanner screen.

Sensing something unusual, the security personnel attempted to examine the matter further. However, the passenger allegedly tried to escape from the screening area, according to CISF.

Displaying promptness and alertness, CISF personnel immediately chased him and apprehended him near the station’s exit gate before he could leave the premises.

A subsequent examination of his belongings led to the recovery of an unidentified semi-solid substance concealed inside a stitched portion of his undergarment, the CISF said.

According to reports, the passenger reportedly claimed to be a non-resident Indian (NRI) residing in Kuala Lumpur, Malaysia.

Following the recovery, the CISF handed over the passenger, along with his belongings and the suspected substance, to the police for further investigation.

The nature of the semi-solid substance and the reason behind its concealment remain unclear. Police are investigating the matter to establish the identity of the substance and determine the circumstances surrounding the incident.

The CISF’s swift intervention prevented the passenger from leaving the station without further examination.

The force said its personnel remain alert during the screening of passengers and their baggage to ensure compliance with security protocols and prevent any potential threat to metro commuters. Further action in the case will depend on the findings of the investigation, said the police officials.

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Crime

Bihar MLC election: Three FIRs filed against Anant Singh, Jan Suraaj candidate Anuj Singh

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Amid campaigning for the biennial elections for eight MLC seats on October 23 in Bihar, police have registered three FIRs in connection with alleged violation of election rules during a roadshow in the Mokama Assembly constituency of Patna district.

The roadshow was held on Sunday. The cases have been registered against local MLA Anant Singh and Jan Suraaj candidate Anuj Singh, according to police sources.

Of the three cases, two were registered at Barh police station and one at Mokama police station in Patna district.

The police are investigating the alleged violations and examining the circumstances surrounding the roadshow.

According to police sources, the action followed complaints of violations of the Model Code of Conduct and other applicable regulations during the Member of Legislative Council (MLC) election-related event.

The allegations concern compliance with rules governing political roadshows and public campaigning.

However, the specific allegations against each leader and the legal sections invoked in the FIRs have not yet been independently confirmed.

The registration of the cases has triggered political discussions in the Mokama and Barh areas, where election-related activities have intensified.

During the MLC election period, candidates and political parties are required to comply with the Model Code of Conduct and applicable rules governing public meetings, roadshows, permissions and traffic management.

Authorities can initiate legal action when alleged violations are reported.

However, the filing of an FIR does not establish guilt. The allegations against Anant Singh and Anuj Singh will be subject to investigation and the due process of law.

Police said further action would be taken on the basis of the evidence collected and the findings of the investigation.

Additional details are awaited.

Anant Singh, the JD(U) MLA from Mokama in Patna district, has openly extended his support to Jan Suraaj candidate Anuj Singh and is campaigning against his own party’s official nominee, Neeraj Kumar, in the upcoming MLC election.

Anant Singh said his decision to support Anuj Singh stemmed from a personal dispute with Neeraj Kumar. He clarified that his move had nothing to do with his political relationship with the JD(U).

The election for eight Legislative Council seats is scheduled to be held on October 23, with counting of votes and announcement of results set for October 27.

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