Indian authorities are closely examining directors and other key executives of Chinese companies registered in the country to check whether these are genuine businesses and not shell entities.
The ministry of corporate affairs is in the process of identifying and deregistering shell companies that have been involved in predatory lending by Chinese loan apps without regulatory oversight.
The government is investigating entities and people involved in facilitating these loan apps.
"There have been instances of individuals being on boards of multiple companies. The idea is to look into the genuineness of operations of the entities and role of the directors," Economic Times quoted a senior government official as saying
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The probe overseen by the ministry will make it clear if the same set of people are serving on several boards.
As per the report, such shell companies will be deregistered to prevent them from doing any business in India.
According to the Economic Times report, the investigation involves verifying the credentials of Chinese nationals holding important corporate positions in India to determine whether they are directors of multiple companies, which will help the ministry to find out the shell companies that are currently operating in the country and deregister them.
According to the report, companies with the same individuals serving on several boards would be deregistered from conducting any business in India.
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Moreover, the ministry of corporate affairs is trying to identify the fake firms that indulged in predatory lending through Chinese loan applications without legal control.
Earlier this year, the ministry of home affairs found 348 Chinese mobile applications that were acquiring and sending data to foreign servers without authorization.
