The troubles for Chinese smartphone manufacturer Vivo continue to escalate as the Enforcement Directorate (ED) makes three more arrests in connection with its ongoing investigation into the company’s financial dealings. Official sources with knowledge of the case have revealed this latest development.
Earlier, four individuals, including Lava International MD Hari Om Rai, Chinese national Guangwen (Andrew Kuang), and chartered accountants Nitin Garg and Rajan Malik, were detained under the Prevention of Money Laundering Act (PMLA) concerning Chinese smartphones. The arrests were made as part of the ED’s extensive probe.
Vivo’s legal challenges intensified as the Delhi High Court dismissed a petition filed by the smartphone manufacturer in response to the arrests. The court upheld the order that placed the officials in ED custody, and their judicial custody was subsequently extended by a Delhi court last month.
In a significant move, the ED filed a chargesheet against Vivo under the PMLA, listing 23 other associate companies, including Lava International. The charges allege that Vivo diverted proceeds amounting to nearly INR 1 Lakh Crore from India to overseas accounts through the use of shell companies.
The ED initiated its investigation against Vivo-India in 2021, raising suspicions of illegal transfers exceeding INR 60,000 Crore to the company’s Chinese entity, potentially to evade taxes in India. The investigative agency took action in July 2022, conducting raids on 48 premises linked to Vivo. During the raids, the ED claimed that the Chinese smartphone manufacturer had transferred proceeds totaling around INR 62,476 Crore out of India.
The ramifications of these charges have also affected Vivo’s business operations, with the government imposing a halt on the export of 27,000 Vivo phones from India, valued at $15 Million.
