Fintech companies are facing a crackdown from the authorities for cheating their investors. According to reports from Bengaluru, the Varthur Police of Bengaluru has booked Gurgaon-based Transactory Technologies Private Limited (Lendbox) and One MobiKwik Systems Limited (MobiKwik) on charges of fraud and misappropriation of investors' money. This case has been registered on account of the MobiKwik Extra investment plan scam affecting scores of investors across India, involving crores of rupees.
It is alleged that these firms had heavily advertised their "MobiKwik Extra" scheme. Their investors were lured with the assurance of the safety of their money, along with the provision of withdrawals whenever necessary. Attractive promises prompted the investors to invest, but later on companies blocked their money without their consent, and they were not able to take out their own money. At present, two investors have lodged complaints with the police, and this has raised suspicion of a big scam. Here are the details of the complaints:
- First Complaint: An investor, Arjit Singh Benchor, on May 14, said that he had blocked about ₹4 lakh (around ₹400,000) through the platform, and he was not able to take out the money. He alleged that the money of investors had been diverted (embezzled) in violation of the Reserve Bank of India (RBI) regulations. It is claimed that more than ₹6 crore (around ₹6 crore) belonging to 630 investors across the country may be stuck in this scheme.
- Second Complaint: Another investor, Mayank Dey, stated in his complaint that he had invested ₹3 lakh through MobiKwik and Lendbox, of which ₹91,341 is still blocked. According to his complaint, approximately ₹5.93 crore belonging to more than 420 investors across the country may be stuck under this scheme.
The first complaint also cites a borrower mapping report and lender verification dated May 5th. This shockingly reveals that the accounts of many borrowers involved in this scheme have either become inactive or have defaulted, but investors' funds are still stuck in accounts linked to the accused companies. The complainant has demanded the freezing of the companies' bank accounts and legal action.
MobiKwik, launched in 2009, is primarily a digital wallet and mobile payment platform that offers features such as UPI payments and bill payments. Based on these investor complaints, the police have registered a case of fraud under sections 319(2) and 318(4) of the Information Technology Act and the Indian Penal Code (IPC). The police are now thoroughly investigating the financial records related to the transactions, which will provide a clear picture.