- The Ministry of Corporate Affairs (MCA) plans to deregister 300-400 Chinese companies in India, focusing on digital lending apps accused of predatory practices and financial fraud.
- This move, affecting firms across 17 states, follows a broader investigation into over 700 Chinese companies, aiming to enhance transparency and address unethical business activities.
The Ministry of Corporate Affairs (MCA) is set to deregister up to 400 Chinese companies operating across 17 states within the next three months, according to a report by Moneycontrol citing an unnamed government official. This action is part of a broader investigation into over 700 Chinese companies, focusing on predatory lending practices, financial fraud, and other violations.
The MCA's investigation primarily targets digital lending apps associated with Chinese corporations, accused of aggressive debt collection tactics, exorbitant interest rates, and unethical harassment practices.
"The inquiry on almost 600 Chinese companies stands completed. There will be a substantial number of anywhere between 300-400 companies which will be struck off. These include loan apps, online job companies, etc," the official noted.
The Registrar of Companies (RoC) will officially deregister these entities, rendering them legally invalid as businesses. Many companies are either untraceable at their registered addresses or have shifted to different business activities despite receiving initial investments. Cases of financial and incorporation-related fraud have been identified, including instances where Indian directors manage accounts operated from China and other companies show no transactional activity.
Under Section 248 of the Companies Act, these companies will receive an initial notice to respond within a specified timeframe, followed by a second notice a month later if there is no response, ultimately leading to their removal from the registry.
Additionally, the MCA is investigating another 30 to 40 Chinese companies, including manufacturers of mobile components like batteries and screens. This investigation aims to ensure transparency and accountability in dealings with Chinese firms in the technology, infrastructure, and finance sectors.
The 300–400 firms likely to be struck off are spread across states, including Delhi, Bengaluru, Uttar Pradesh, Andhra Pradesh, Mumbai, and Chennai. The MCA's crackdown underscores India's growing concern over the impact of predatory lending apps and the need for stringent regulatory measures to protect consumers and maintain financial integrity.
Edited by Harshajit Sarmah
