According to The Straits Times, a Singaporean publication that covers regional news, India’s Executive Directorate (ED) under the Finance Ministry revealed in late February that Indian shell companies were paying Singaporean companies with proceeds of crime obtained from loans, gambling and betting schemes.
“The ED’s investigation revealed that proceeds of criminal activities derived from these programs were accumulated and laundered through ‘mule’ accounts opened in various banks in the state of Kerala using payment aggregators,” the directorate said in a statement.
Funds were transferred through several shell companies operating in several cities in India. Nium India, a subsidiary of global remittance platform Nium Singapore, was used for their transfers. This was done in order to hide the money from the monitoring authorities.
1.23 billion has been frozen, the ED said. rupees (€18.54 million) in alleged criminal proceeds of Singapore shell entities held in Nium India bank accounts. Dozens of raids have been carried out at the premises of Nium India and its directors in Mumbai, as well as various related companies, The Straits Times reports.
Following the law enforcement action, Nium announced in early March that it was suspending the collection of premiums at its India unit, according to dealstreetasia.com website.
Nium (formerly InstaRem) is an international financial transfer startup founded in Singapore in 2014. The company has offices in Singapore, San Francisco, Amsterdam, Malta, London, Mumbai and Vilnius. in 2017 Nium EU, founded in Lithuania in June, currently employs 22 people.
Still, the law enforcement allegations in India appear to have done little to dent the parent company’s international reputation, with Nium newly registered in New Zealand as a financial services provider last week.
“This registration adds to Nium’s extensive portfolio of licenses and registrations, which covers more than 40 countries worldwide,” the company said in a statement.
The Bank of Lithuania remains confidential
Since 2017 “Nium” has seven types of operating licenses issued by the Bank of Lithuania, which allow the provision of these services in the EU.
How 15min stated the Bank of Lithuania, information regarding plans, conducted or planned inspections of financial institutions cannot be disclosed due to confidentiality.
“Lietuvos bankas is guided by risk-based supervision of financial market participants. This means that we focus our attention and resources on the sectors, areas and actors in which we see the greatest risk. We evaluate many and various criteria, including information that has appeared in the public space or received from the supervisory authorities of other countries. The prevention of money laundering and terrorist financing is one of the areas to which we pay special attention,” Giedrius Šniukas, media representative of the Bank of Lithuania, said in a sent comment.
The Bank of Lithuania publicly announces part of its planned inspections at the beginning of the year, but not all inspected entities are listed in them. Nium EU 2024 was not in the plans yet.
So far, UAB “NIUM EU”, which has had a license to provide financial services in Lithuania since 2017, has been subject to sanctions once – in 2022. 10,000 was allocated by the decision made in July. EUR fine for improper protection of customer funds.
Pauliaus Peleckis / BNS photo / Bank of Lithuania
Such measures were taken due to the fact that the company kept not only its customers’ but also its own funds in the payment account of UAB “NIUM EU”, intended for receiving, storing and making payments. During the audited period, UAB “NIUM EU” provided the Bank of Lithuania with incorrect information regarding the balances of own and customer funds in the accounts, as well as the amounts of customer funds to be kept.
“Nium” representatives: the investigation does not affect the activities in Lithuania
Comments 15min company officials said the suspects the ED is investigating are not Nium customers.
“However, as we understand, the ED believes that some of these fraudulently obtained funds may have been transferred from India through Nium’s Indian subsidiary, Nium India Pvt. Ltd.Nium takes the allegations of misuse of its platform very seriously and is cooperating fully with the ED in the investigation,” reads the comment received.
The company emphasized that the ED investigation is limited to Nium India Pvt. Ltd.” transactions and does not affect other Nium entities, including operations in Lithuania.
“Nium has a comprehensive anti-money laundering program and works closely with regulatory and law enforcement authorities to detect and prevent illegal activity in all markets in which we operate,” comments the company.
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2024-05-02 12:12:40