True story of fake network

“I’m trying to remove my name [from the company’s rolls] but to no avail. A former colleague, who was aboard me, kept delaying it and now his phone is always switched off,” the Bihar resident told Mint over phone.

He had joined Su Hui Technology Pvt Ltd in Gurugram as a director in August 2021 after months of unemployment. It was a new firm—it was incorporated a year earlier. It promised him a ‘reasonable’ job after the company closed down. But they did not sign any contract, neither did they get any money, nor got any job for these directors, they claimed. A few months later, he panicked when he mentioned a Chinese national as a former director in Su Hui. This comes as the government cracked down on Chinese companies, cracking down on China-linked loan apps and increasing scrutiny of foreign direct investment from Beijing.

Su Hui’s director said that a sinking feeling had set in: he felt he was a “dummy” director at the moment.

Their fear deepened in September 2022, when Su Hui was named along with five other firms – Lillian Technocab Pvt Ltd, Shigu Technology Pvt Ltd, Mad-Elephant Network Technology Pvt Ltd, X10 Financial Services Ltd and Nimisha Finance India Pvt Ltd. Gone. In the investigation of crypto and loan apps by the Enforcement Directorate (ED).

The 31-year-old said he had no idea about Su Hui’s business, and has yet to be called by an investigative agency.

But there appears to be only one thread in a great web of deceit that has dried up.

Officials of the Serious Fraud Investigation Office (SFIO) under the Ministry of Corporate Affairs (MCA) suggest that these companies have also come under their radar as part of a larger investigation into the racket of shell companies with Chinese links.

The term “shell company” usually refers to a firm with no active business and is sometimes misused for tax evasion, money laundering, concealment of ownership, etc. The companies mentioned above have been involved in all kinds of app frauds related to insta loans, crypto. SFIO officials said, job offers, gaming, dating, etc. More interestingly, the money and document trails of these companies all lead to one firm: Jillian Consultants India Pvt Ltd. That’s the untold story of the company that was accused of shelling firms and fraudulent loan apps—and a vast maze of its China connections swirling around.

how did it start

Jillian Consultants India Private Limited was incorporated in August 2017 in Delhi, and was later shifted to Gurugram. “We are a Chinese-invested professional consulting company in India, providing various professional services to Chinese-invested companies in India,” a Jillian India spokesperson told Mint over email. Simply put, it helped companies funded with Chinese money to navigate legal and regulatory. Requirements in Indian environment

It was founded by Wan Jun (aka Alina Wan), a Chinese national and an Indian (Sreedharan Unni Krishnan), who left the company after six months. In his place, Sakshi Bansal also left the company in five months. One of its directors, Dortsey, is one of the main accused in the MCA investigation and was arrested on 10 September. She is a Tibetan refugee, and has no family in India, the principal of her school said. Even their official documents mention the school address in Mandi, Himachal Pradesh under their address declaration.

According to documents uploaded on the MCA website on 27 October 2021, Jillian India is a subsidiary of Jillian Hong Kong, which holds 99.99% of its shares. In its official reply to Mint, however, a Jillian India spokesperson denied that it was a subsidiary. Jillian of Hong Kong.

SFIO officials familiar with the matter said that so far the SFIO investigation has focused on 32 companies as well as Jillian India, which is the centerpiece of the whole puzzle. They did not want to be named.

On September 8, Jillian’s office premises in Gurugram were raided by the officials of the Registrar of Companies (ROC), Delhi. They confiscated “boxes filled with company seals and digital signatures of dummy directors”.

Prima facie, all the companies under investigation appear to have been incorporated by Jillian, and to some extent were “controlled” by it, an SFIO official said. “Control”, as per Section 2 of the Companies Act, 2013, can also be indirect, and not always through shareholding or management, the official argued.

The ED also suspects the involvement of Jillian in the companies involved in these frauds.

For example, take the FIR (First Information Report) lodged in the Cyber ​​Police Station of Kohima, Nagaland in October last year, which was investigated by the ED. Complaints from several victims revealed that they were duped by WhatsApp messages promising higher returns if they invested in “HPZ tokens”, informed an official aware of the matter. The investigation revealed that the HPZ Token website was operated by Lillian. and Shigu, the ED said in a press release dated 16 September 2022. Does Lillian or Shigu have any connection with Jillian? Here’s what Mint got.

follow the trail

Mint scrutinized the evidence to establish the nature of the connection between the companies named in the app fraud and Jillian India. We found several close links between Jillian and at least five companies—Su Hui, Shigu, Yellow Tune, Mad-Elephant and Aliye Network Technology India Pvt Ltd—named by the ED in its raids in August and September 2022.

Su Hui and Shigu’s incorporation documents, retrieved from the MCA website, were endorsed and signed by Rajni Kohli, a company secretary. She is a former employee, Jillian acknowledged in her reply to Mint, but said she left “a long time ago. These documents were signed in June 2020 and April 2021. A Facebook post from Jillian’s account established confirms that she was with the company till at least May 2021. Kohli was arrested by the Delhi Cyber ​​Police in June last year for helping to form several shell companies. He was listed in a letter by the MCA from February this year. Many company secretaries were involved in “professional misconduct”. The letter mentions both Su Hui and Shigu and the many companies they helped create.

Four of these five companies (Su Hui, Shigu, Mad-Elephant and Aliye) have the same official email ID on MCA documents: corporatejillian@gmail.com. But why would a legitimate company use a service provider’s name in its official email ID? Are these companies linked to the source if they have the same ID?

In June and July 2021, two former Shigu directors sent their resignations to corporateJillian@gmail.com, flagging a Jillian India employee. One of them even asked for acceptance of resignation over email, as if reporting to his manager.

The two companies, Yellow Tune and Mad-Elephant, used the same registered address in Bengaluru, that of Finnity Pvt Ltd, which is 99.99% owned by Jillian India. The address is of a virtual or co-working space called Brickspace, which confirmed that both Yellow Tune and Finnity were recommended by Team Cowork, a Delhi-based office solutions firm. Both were registered at the address within a period of two days in March 2021. Team Cowork confirmed that the original reference to the two came through Jillian India. Mad-Elephant was recommended to Brickspace via Flexispace, which has yet to confirm the original source of the reference.

Brickspace said that upon finding that many of these entities had misused space, it sent a letter to ROC, Bengaluru in September this year asking them to delete the addresses of 246 companies whose agreements had already expired. It said another 30 companies also used the address without submitting proper documents. Brickspace said it was a victim of these unscrupulous companies.

However, another SFIO official has a different opinion. “Over time, they have provided their space to around 1,200 entities (both companies and proprietorships) for legal purposes. But it is impossible to place hundreds of companies at once. Every company will need a locker as it is mandatory to maintain all official records (certificates, board documents, financials, etc.) at its registered address.” Brickspace said it charged a fee. 6,000 per year for its service, which the official said was too low for such a service in Bengaluru. Brickspace confirmed that Finnty, Yellow Tune and Mad-Elephant did not maintain locker space with it.

Jillian Consultants did not comment on any of the above links when Mint sought feedback over email.

In its earlier reply to Mint, it was emphatic that “it fully complies with all relevant local Indian regulations, including the prevailing Companies Act, Department for Promotion of Industry and Internal Trade, Ministry of Home Affairs and RBI regulations”. We did not involve any so called shell company.

dummy director

Suspiciously, all of these companies have multiple directors who have been stuck for only 4-6 months, as was true for at least two of Jillian’s former directors.

One such former director of Yellow Tune Technologies admitted to Mint that he had nothing to do with the company’s operations, but that some board documents contained his signature.

In some respects, the director has been quite young. For example, Finnity Pvt Ltd, a 99.99%-owned subsidiary of Jillian India, had a director in January 2021 who turned just 18 in December 2020.

According to a former employee of Jillian India, employees in India never interacted directly with customers – they processed paperwork and provided necessary information. He said Chinese managers dealt with customers, many of them from China. He acknowledged that Indian directors (such as the 31-year-old man from Bihar) were usually a front. A minimum of two directors is required for a private company under the Companies Act, 2013; At least one director should have resided in India for at least 180 days in the previous year.

Officials vehemently reject this argument. “How can the original owner of a company sitting in China transact in India, without any backing?” SFIO official quoted earlier. Any transaction that requires the facility of agreement with banks or non-banking financial companies and payment gateways. In India, that was probably done by Jillian’s local employees, he said.

scam

How big is this racket? SFIO officials say the numbers are difficult to tell, as “new facets and new players” are emerging as the investigation progresses.

By denying that Jillian India is a subsidiary of Jillian Hong Kong, are the big fish leaving the Indians to fend for themselves? Legally, officials say that dummy directors can be held responsible for misconduct in their company during their tenure. “Companies work on the principle of inheritance. A former director can always be asked to explain something, even if it is discovered years later,” said one of the SFIO officials. Many of these were young people who were ignorant, but not all. Some of them acted greedily, hoping for a kickback, though they didn’t call the shots, he said.

The former employee of Jillian cited above expressed dismay at the fate of Jillian’s owners (who are in China) and the contrasting fate of her Indian employees. “We are being regularly asked to present ourselves for questioning. We don’t have a job, and we can’t look for a new job because you never know when you’ll be called for a checkup.” And, what was it all for? For a salary of a few thousand rupees, he said .

The SFIO official said that now that the focus is on 33 companies, “the net can be expanded if needed”. Is Jillian the mastermind behind all the Chinese-linked app fraud we’ve heard over the years? “Even though it is not the mastermind, it is a key player,” said the SFIO first official. “And who knows, there may be many Jillians”.