Chinese online betting applications case: ED conducts raids at 8 places in Hyderabad, Andhra

New Delhi [India], August 25 : The Enforcement Directorate (ED) has carried out searches at eight premises of Human hair merchants and exporters in Hyderabad and Andhra Pradesh in connection with its ongoing money-laundering investigation against Chinese online betting applications, the agency said on Wednesday.
During the searches conducted on Monday, the ED said it seized 12 mobile phones, three laptops, one computer, handwritten dairies, "Kacha account books" and loose sheets containing incriminating information.
Total unaccounted cash of Rs 2.90 crore was also seized from the possession of the hair merchants, said the ED, adding "these exporters and merchants could not explain the source of the money found at their premises".
The search operation was carried out in Hyderabad and Andhra Pradesh's West Godavari District under Foreign Exchange Management Act (FEMA) 1999.
During the money-laundering investigation by the ED against Chinese online betting applications, officials in the agency said, it was noticed that "hawala" payments to the tune of Rs 16 crore were paid to Human hair merchants.
"Consequently FEMA investigation was initiated against the hair merchants based in Telangana and Andhra Pradesh."
The ED in its investigation found that many domestic merchants were aggregating and selling the raw hair to foreign merchants based in Hyderabad, Guwahati, and Kolkata.
"Then this hair were smuggled out of India via road via points at Moreh (Manipur), Zokhawthar (Mizoram), Aizawl (Mizoram), etc, to Mandalay (Myanmar)," said the ED.
Ultimately, the federal agency said, it found its way to China, where these were labeled as domestic Chinese hair and processed.
"Chinese traders are thus able to avoid import duty of 28 per cent at the time of import and also earn 8 per cent export incentives at the time of export by claiming smuggled Indian hair as Chinese hair," said the ED.
"Many Indian exporters are also suspected to be under-valuing the exported human hair in terms of value and quality to evade import duties in the recipient country."
Further, the ED said, it was also found that two Hyderabad-based merchants had received Rs 3.38 crore for domestic sale to Northeast merchants through illegal Chinese App (Linkyun Technology Private Limited and Dokypay Technology Private Limited) Company's Paytm Accounts.
"It is also noticed that few Myanmar Citizens are permanently stationed in Hyderabad, and are purchasing human hair locally and then exporting it to Myanmar by using the IEC code of Indian persons and entities at under-valued prices."
The difference amount is settled either locally or through hawala channels, said the ED, adding it is analyzing the purchase and sale export prices and quality.
"Prima facie it is suspected that human hair exported to Myanmar, Bangladesh, Vietnam, Austria, etc are under-invoiced.
"Evidence has further revealed that some entities have been receiving payments against the sale of human hair in the bank account of their employees and subsequently cash is withdrawn and handed over to their owners," mentioned the ED.
Most of the exporters, the agency said, are not maintaining proper books of accounts and are also evading Income tax liabilities.