New turn in ‘hawala’ probe
Shady transactions, human hair export
Investigation into the multicrore online gaming fraud involving Chinese companies has taken a new turn with detectives stumbling upon evidence pointing to a hawala network that was being operated to fund individuals who were exporting goods to China.
A Hyderabad-based merchant who supplied tonnes of human hair to China through an exporter based in West Bengal had received
`80 lakh through a Chinese gaming company which had a tieup with the payment gateway Cashfree. This has now put multiple investigative agencies on the hawala trail.
Simultaneously, the sleuths have come across hundreds of shady transactions to the tune of hundreds of crores even as links have emerged between a Honk Kong-based company and Beijing T Power Company which was running an online gaming fraud in India. Further, some IP logs of the Chinese gaming companies are from Pakistan.
Sources in various agencies who stumbled upon the new leads in the case disclosed to Deccan Chronicle that the Hyderabad-based merchant had been a regular supplier of human hair to the Kolkata-based exporter.
The merchant would collect the hair from barber shops across Hyderabad and send them to Kolkata. Chinese firms buy a kilo of hair for anything between `500 and
`8,000 or even more, depending on the quality. Over the years, demand for human hair has increased in China due to growth in
CHIEF FINANCIAL officers and technical officers of various payment gateways continue to be summoned by the Central Crime Station of Hyderabad police for questioning in connection with the online gaming fraud and their specific roles in the illegal trade. Though no criminal offence has been made out against them so far, sources said that they are being pulled up for negligence as massive transactions kept happening unchecked on their watch.
● HUMAN HAIR is in great demand in China and a bulk of the exports of the commodity is from India. West Godavari district in Andhra Pradesh is one of the largest suppliers of human hair to China. Two types of hair come from the Indian market: Remy hair which is the highest grade of human hair which is a preferred choice for hairpieces and wigs and non-Remy hair, which is household waste collected by local workers, who sell it to dealers and who in turn sell them to hair export firms. More than two lakh people are directly and indirectly involved in the human hair industry.
the make-up and making industry.
As investigators were scrutinising transactions of the gaming companies established by the Chinese company and their dealings with payment gateways like PayTM, CashFree, Razorpay among others, they stumbled upon hundreds of shady transactions including the one of the human hair merchant.
It was found that another gaming company — Aoke Club — established by the Chinese company had an account with Cashfree through which an amount of `80 lakh was deposited into the bank account of the local merchant. This way, both parties do business, evade taxes and import duty among other charges in both countries and mint money.
“Betting is one aspect of the investigation but the larger aspect is that of a systematic hawala network. Outward
wig
transactions to various merchants and individuals have been traced from companies and gateways linked to the Chinese companies. There have been payments made to some persons in Srikakulam to the tune of `2 crore, about `30 lakh to an individual in West Godavari district.
Further, a new Hong Kong based company’s links with Beijing T Power company have been found, with transactions worth several hundreds of crores. Various agencies, particularly the Enforcement Directorate and income-tax sleuths, are working on the new leads.
The Enforcement Directorate had recently pointed out that payment gateways like Paytm, Cashfree, Razorpay etc had lax due diligence mechanisms and their non-reporting of suspicious transactions to the regulatory authorities helped the accused companies to launch pan-India operations.