VueNow Infotech has inaugurated two Edge data centers in Uttar Pradesh, India, while in the midst of a money laundering investigation.
The data centers are located in Malihabad and Ambedkarnagar, and are part of a wider plan to deploy as many as 750 Edge data centers across the state.
The inauguration ceremony was led by Nitin Agarwal, Minister of State for Excise and Prohibition, with attendance by Anil Kumar Sagar, IAS Secretary of IT and Electronics, and Neha Jain, Special Secretary.
VueNow signed a Memorandum of Understanding (MoU) with the Uttar Pradesh government in 2021 valued at Rs 13,500 crore (US$1.6bn) to develop the infrastructure for 750 Edge data centers across the state.
The company has Edge data centers already operational in Ghaziabad and Raebareli, and plans to launch others in Varanasi, Prayagraj, Ayodhya, and Gorakhpur. An exact timeline for those additional locations has not been shared, but the company has completed the land acquisition process.
The company aims to have the 750 data centers deployed by 2028, aiming to reduce latency in the state and meet the increasing demand for computing power.
The size, capacity, and exact locations of the data centers were not shared.
VueNow is currently in hot water and is facing a money laundering investigation in connection with the "cloud particle scam."
According to a report from The Hindu, a preliminary investigation by the Enforcement Directorate - the Indian organization responsible for investigating money laundering and financial crimes - has found that more than 25,000 investors have bought "cloud particles" (selling servers to people and leasing them back with the assurance of rental income to investors) and has received around Rs 2,200 crore ($258.7m) in lieu of the sales.
“Fraudsters dupe the investors over a longer period of time and the scam is hard to detect as the victims continue to benefit from high periodic returns on their investments in the cloud particles, unaware of the fact that there is no such digital infrastructure in existence,” an official said.
According to the report, VueNow does not have the "proportionate infrastructure" to that which it was sold and was promising up to 40 percent returns annually to investors.
During the search, 67 bank accounts of VueNow Group of Companies and related entities/individuals were frozen under the provisions of PMLA, 2002. VueNow has challenged the investigation, though it remains ongoing. DCD has contacted the company for comment.