The Ministry of Corporate Affairs 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.
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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 told that 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 difficult sometimes to track the funding sources for some companies, the official said efforts are made to ascertain the beneficial ownership.
In January, the Registrar of Companies (RoC), NCT (National Capital Territory) of Delhi and Haryana slapped penalties totalling more than ₹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 the Parliament that Google has suspended or removed more than 2,200 fraudulent loan apps from its Play Store between September 2022 and August 2023.
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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 aims at firming up the regulatory framework for digital lending while enhancing customer protection and making the digital lending ecosystem safe and sound.