The Enforcement Directorate on Saturday said it arrested a director of a non-banking finance company under provisions of the Prevention of Money Laundering Act.
Director and chief executive officer of Kudos Finance and Investment Private Limited, Pavitra Pradip Walvekar, who was arrested on Friday, was also produced before the PMLA special court at Hyderabad, the press release stated.
The KFIPL, the ED said, “purportedly” engaged with digital lending partners as a service provider to assist in identifying prospective customers, conduct pre- and post-loan procedures, among other services such as service requests /product-related queries for retail loans offered by the company.
The company neither had a mobile application nor was involved in the lending business, but it was blindly allowing fintech companies to operate at the back of MoU with fintech mobile app companies, the statement said.
The ED investigations revealed that the company despite having a net owned fund (aggregate of its paid-up capital and free reserves) of just ₹10 crore, it circulated loans totalling to ₹22,24,15,11,508, funded by 39 fintech companies. Through the business transactions so far, the company gained ₹24 crore profit and the fintechs made a profit of about ₹544 crore, it stated. It added that KFIPL allowed misuse of its licence by fintech companies and was in clear violation of RBI guidelines to NBFCs.
The PMLA special court remanded Pradip Walvekar, KFIPLs director, in 15 days’ judicial custody.
