Indian regulator finds money laundering scheme tied to SG firms, Nium

Photo credit: Shutterstock

The Enforcement Directorate (ED), an Indian regulator, has found a money laundering scheme linked to Singaporean shell companies, The Straits Times reported.

The regulator, which is an agency under India’s Ministry of Finance, said that shell companies in India are using fake invoices issued by shell companies in Singapore to pay for software and other services.

These transactions were funded through loans, gambling, and betting apps controlled by “Chinese entities,” the ED added.

Money from these activities was purportedly laundered through mule bank accounts in India, using payment aggregators for transactions. The agency alleged that Nium India, a subsidiary of Singapore-based fintech firm Nium, was used as a conduit for these illicit funds, which also included cryptocurrencies.

In response, the ED said it has frozen 1.2 billion rupees (US$14.9 million) tied to the Singaporean shell companies from Nium India’s accounts.

A Nium spokesperson told The Straits Times that the company is working with the ED, emphasizing the investigation revolves around certain transactions facilitated through its Indian arm by “alleged bad actors” in the country that do not involve its Singapore entity.

The development may prompt Indian regulators to tighten rules regarding payment aggregators in the country. Last year, the country had already made amendments to its anti-money laundering regulations to expand its scope.

Nium itself has recently obtained in-principal approval for payment aggregator licenses from the Reserve Bank of India. The spokesperson emphasized that the company is currently not licensed to collect funds.

See also: Indonesia puts more constraints on online lenders, but at what cost?

Currency converted from Indian rupee to US dollar: US$1 = 82.92 rupees.

Correction (March 5, 04:25 p.m. SGT): This article mistakenly said that Nium has obtained payment aggregator licenses in India, instead of in-principal approval to get those licenses. Tech in Asia regrets the error.