India Arrests Chinese Man Amid Raids on Companies Running 11 Small Loans Apps

By Venus Upadhayaya
Venus Upadhayaya
Venus Upadhayaya
Venus Upadhayaya reports on wide range of issues. Her area of expertise is in Indian and South Asian geopolitics. She has reported from the very volatile India-Pakistan border and has contributed to mainstream print media in India for about a decade. Community media, sustainable development, and leadership remain her key areas of interest.
December 27, 2020Updated: December 28, 2020

NEW DELHI—India arrested on Dec. 25 a Chinese man who managed companies that operated at least 11 apps offering small loans at extremely high interest rates to Indian people between the ages of 20 and 40.

Experts see the potential for the regime in Beijing to gather large amounts of data on Indian citizens through the apps, and for this data to be used to infiltrate Indian society, politics, and economic system.

Yi Bai (alias Dennis) was arrested by cyber police in Hyderabad during a raid on a call center, for illegally running money-lending mobile applications, Indian media outlet DNA reported on Dec. 26.

Fifteen people were arrested in three different cities in India (Hyderabad, Delhi, and Bengaluru). The main accused is identified as Zixia Zhang, a Chinese national with a Singapore residence, who has absconded along with an Indian accomplice.

During the raids, the police also seized more than 2 crore rupees (about $271,000) in cash, The Times of India reported.

Some of the loan apps that the companies managed include Loan Gram, Cash Train, Cash Bus, AAA Cash, Super Cash, Mint Cash, Happy Cash, Loan Card, Repay One, Money Box, and Monkey Box. A few of the apps were still available on the Google Play store as of Dec. 27, although in several cases, users have issued warnings.

N.C. Bipindra, the editor of strategic affairs magazine Defence.Capital and chairman of Delhi-based think tank Law and Society Alliance, told The Epoch Times that the allegations of fraudulent activity don’t come as a surprise.

“Chinese nationals have been indulging in illegal activities in India for several years now, and many of them have been arrested in previous years for online fraud, money laundering, gold smuggling, spying, and for possessing fake travel documents,” Bipindra said.

He said it’s a part of a larger Chinese game plan to destabilize India and its economic landscape.

“There have been recent reports of how Communist China has been infiltrating global businesses and trying to control economic activity in a foreign country, in the form of investments and hostile takeovers,” he said.

Abhinav Pandya, CEO of India-based geopolitical think tank Usanas Foundation, told The Epoch Times that Indians are vulnerable to such financial schemes because many are lacking in tech literacy.

“They can easily be duped in villages and small cities. This can lead to economic sabotage. It can lead to resentment against a government that is anti-China in national security matters,” he said, adding that such resentment can indirectly affect elections.

“If this is happening at a country level in other parts also, then I am sure Chinese have already stolen immense amounts of data that can be used against India.”

Epoch Times Photo
Screenshots of the app Super Cash and its reviews on Google Play store on Dec. 27, 2020. (Venus Upadhayaya/The Epoch Times)

Customers Harassed, Threatened

For the money-lending operation, Zhang set up a company in India called Digipeergo Tech Pvt. Ltd. along with an Indian partner last year, according to police. With the help of a Singapore-based sister company Xikai Holding Pvt. Ltd., the duo created another company called Skyline Innovation Technology India Pvt. Ltd.

Zhang developed mobile applications and hosted them on Google Play and set up a few call center companies around India to collect payments from customers.

Police said the operatives were indulging in systematic abuse and were harassing and threatening defaulters through the call centers. The Chinese operatives used their Indian accomplices to send fake legal notices to their customers to blackmail them.

Pandya said the scheme is very alarming because it shows how the Chinese are trying to make inroads through mobile apps.

“Their intent is to get to the remotest innards of Indian society. People who are trapped in such digital dragnets end up sharing all their data—mobile, PAN cards, adhar cards [mandatory ID card based on biometric and demographic data), age, friends, preferences, bank accounts, passport numbers,” he said.

That kind of data can be used for all kinds of sabotage, including political, he said.

“With such a strong database, they can meddle with our elections. India, being a democracy, offers all kinds of freedom. Such a database can be used to create social sabotage by unleashing caste and communal frictions and violence, protest over social and political issues, farmer issues,” said Pandya, who is the author of the book, “Radicalization in India.”

He said that when people find themselves dragged into such fraud schemes, they can become more susceptible to be blackmailed to act as spies in small cities by the Chinese.

Such spying assets can be used for various activities against India and for smuggling and other illegal operations. In recent months, an Indian journalist was also arrested for having links with a Chinese national and for taking money from him or her, Bipindra said.

“The journalist, now out of prison, continues to be an accused in the case in which the Chinese national has been accused of paying bribes to acquire key Indian government documents that have serious security ramifications,” he said. Indian media have highlighted similar events recently because of the deterioration of India and China’s bilateral relations because of the continuing border conflict, he said.

Source of Funding

Police say none of the 11 apps that Bai was managing had ties to any non-banking finance companies, and the accused were offering loans using their own resources, according to The Times of India.

“We are looking into how they got the money they lent,” said V.C. Sajjanar, the Cyberabad police commissioner whose team made some of the arrests.

Bibhu Prasad Routray, a geopolitical analyst and the director of Mantraya, a Goa-based think tank, told The Epoch Times that such a business generally doesn’t need a lot of capital to start.

“The nature of such businesses is that you do not need a lot of finance to start and run it,” he said. “Such operations run mostly by circulating the money they collect from the gullible customers.”

Monitoring Chinese Nationals

Routray said that with thousands of Chinese nationals currently in India, there could be many more illegal operations like this one.

“The existing legal frameworks and protocols if followed meticulously can take care of illegal activities. It is nonetheless important to stress that the use of web-based applications to carry out illegal activities could increase in the coming days,” he said.

“Hence, the state governments need to invest more on augmenting the capacities of their law enforcement agencies to keep track of such activities.”

Epoch Times Photo
Screenshots of the Cash Bus app and its reviews on Google Play on Dec. 27, 2020. (Venus Upadhayaya/Epoch Times)

India is taking countermeasures by restricting Chinese investments in businesses and commercial ventures. Bipindra said it should also monitor the activities of the Chinese nationals staying in India and more carefully screen those applying for visas, “particularly those on business visas, to prevent their illegal commercial activities that fall in the category of crimes, including spying, under Indian laws.”

Pandya said India needs to treat this activity with the utmost concern, since the Chinese regime could use it to harm India’s interests.

“Such actions can damage India’s image, make it unattractive to foreign investors, and damage our rankings in doing business, human rights issues, and so on,” he said.