A New York Times report headlined ‘A Global Web of Chinese Propaganda Leads to a US Tech Mogul’ has triggered a political storm in India a year before General Elections, with the ruling BJP raising the issue in Parliament and accusing the opposition Congress of encouraging Chinese interference in the country through the NewsClick website.
The NYT report has claimed that the news portal was part of a global network that received funding from American millionaire Neville Roy Singham, who allegedly works closely with the Chinese government propaganda machine. “In New Delhi, corporate filings show Singham’s network financed a news site, NewsClick, that sprinkled its coverage with Chinese government talking points. ‘China’s history continues to inspire the working classes,’ one video said,” the report noted.
Raising the report in the Lok Sabha, BJP MP Nishikant Dubey alleged that NewsClick is “a member of anti-India ‘Tukde Tukde’ gang”, and demanded that the government investigate the beneficiaries of the funding. In a press conference later, Information and Broadcasting Minister Anurag Thakur alleged that China, NewsClick website and the Congress are linked to an “anti-India umbilical cord”.
NewsClick issued a statement on Monday evening, claiming the allegations being made against it “by certain political actors and sections of the media are unfounded and without basis in fact or law”. There was no immediate reaction from the Congress.
Beyond its political implications, the report has added to the growing heap of instances of Chinese involvement in Indian firms, some of which have been busted for running scams and extortion rackets.
News18’s investigative series titled The Loan Wolves of China had earlier exposed how shady enterprises originating in China are thriving in India under the garb of loan apps, investment companies, and even non-banking financial companies (NBFC). Many of these displayed predatory behaviour after luring innocent Indians into the debt trap. Chinese links have also been detected as far as the diamond industry in Gujarat’s Surat.
The common thread is the money trail leading to China. The ‘Chinese ecosystem’, as investigators call it, has been well-fed through the years, receiving political and administrative patronage.
Since 2020, the Enforcement Directorate has busted multiple China-influenced financial operations and rackets. “This is just the tip of the iceberg. Chinese connections are deep-rooted and it has spread its tentacles across sectors,” a senior ED officer told News on condition of anonymity.
The Chinese Cobweb
- In February 2021, the ED raided the NewsClick office after the Ministry of Corporate Affairs went through the portal’s funding pattern and allegedly unexplained export remittances in filings with the Registrar of Companies (ROC). The raids continued for five days and several employees were examined until the company moved court and won a stay on the investigation.
- Around 25 FIRs lodged in the Bangalore zone in 2022 led the ED to a money laundering trail involving Chinese loan and investment apps. Based on multiple FIRs filed by debtors and investors, the ED registered six cases last year. According to the FIRs, the primary allegations against the apps were criminal intimidation, blackmail, capturing data and intrusion of privacy. Complainants alleged they were charged more than 40% interest in seven days. As the investigation progressed, a bigger conspiracy emerged revealing the use of cryptocurrencies to whitewash the ill-gotten gains.
- Investigations revealed how Chinese mobile manufacturer Xiaomi Technology India Private Limited and three international banks operating in India allegedly sent Rs 5,500 crore as ‘royalty’ to China in violation of rules. The existence of at least 300 smaller companies operating with dummy directors and being used as the filters for money laundering also came to light.
- During the investigations, purported connections merged between a Surat-based diamond merchant and Chinese nationals. The probe is ongoing
- The probe also blew the lid off another scam involving persons of Chinese-origin, Indian NBFCs and fintech units, wherein Chinese individuals used to directly coordinate with the NBFCs and sign agreements without the directors of fintech or Chinese-referred companies being aware. The NBFC employees assisted the Chinese nationals without examining their credentials or their relationship with the fintech companies to protect their commissions.
The cases lay bare the extent of China’s influence in Indian financial operations, and even banking systems, through agents. In all the cases, investigations, sooner or later, met some Chinese link.
The Crypto Crisis
In majority of these scams and rackets, cryptocurrencies have been extensively used to conceal the illegitimate origin of payments. ED investigations into the loan apps revealed that money laundering through cryptocurrencies took place in three layers.
At least 14 private companies are accused of sending its proceeds to six entities that converted them into cryptocurrencies. The six private agencies transferred the amount in the form of cryptocurrency to four Chinese entities. These were shown as crypto investments.
Such companies don’t comply with statutory filings such as annual reports to the Ministry of Corporate Affairs, and Income Tax returns. If such companies were persuaded by a professional to get their balance sheet audited, the Chinese nations would relieve the professional from their duty and assign someone else in place, another senior ED officer told News18 on condition of anonymity.
Manipulation MO
According to investigators, the Chinese handlers of these companies used KYC documents of BPO employees or unemployed youth to register new companies by appointing them as directors and subscribers of the memorandum of association with the active assistance of Indian professionals like chartered accountants.
“The directors and shareholders were not even made aware that they were directors or subscribers to the memorandum which is the level of crime committed by the perpetrators/certain individual directors and professionals,” said a source.
During the course of the investigation, ED officers recorded the submission of an individual who was allegedly involved in the incorporation as well as directorship of eight companies, which she admitted was done on the instructions of her husband, who was, in turn, receiving instructions from Chinese nationals.
Following such revelations, the Ministry of Home Affairs and the Finance Ministry have been closely monitoring cases with Chinese links to prevent this ‘iceberg’ from tipping over.
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