Vivo’s Chinese Directors Flee India As ED Intensifies Money Laundering Investigation

The Chinese directors of the smartphone maker Vivo have reportedly fled from India after the Enforcement Directorate (ED) stepped up its investigation into the smartphone maker on money laundering allegations.

ANI reported citing sources that Zhengshen Ou and Zhang Jie, two Chinese nationals working as directors at Vivo India, have fled the country.

Two days ago, the ED conducted searches at 44 locations of Vivo across the country. The searches were conducted under the sections of the Prevention of Money Laundering Act (PMLA). 

Along with ED, the Central Bureau of Investigation (CBI) is also probing money laundering charges against the Chinese smartphone maker.

The ED filed a money laundering case after it took cognisance of an FIR filed by Delhi Police against a Vivo distributor, which alleged that a few Chinese stakeholders forged their identification documents.

The federal agency is working under the suspicion that the alleged forgery was done to launder money using shell companies and divert it abroad or invest in other companies, circumventing Indian tax laws.

The Ministry of Corporate Affairs sought an inquiry in April this year to detect if there were irregularities in ownership and financial reporting at Vivo India.

A day after ED conducted raids on Vivo, China expressed hope that India will lead the investigations into the smartphone maker according to law and regulations. China also hoped that India would provide a ‘truly fair’ and ‘non-discriminatory’ business environment for Chinese companies.

Vivo is not the only Chinese company that has been on the radar of Indian authorities recently. Xiaomi, Huawei, Oppo, OnePlus and Alibaba are all being investigated on charges of tax evasion and money laundering by ED and other central agencies.

Xiaomi saw its bank accounts seized by ED, which held funds to the tune of INR 5,551.27 Cr a few months ago after the central agency started investigating the Chinese smartphone maker under sections of PMLA.

While Karnataka High Court gave the Chinese smartphone maker interim relief by handing back the said bank accounts, Xiaomi alleged rough treatment at the hands of ED officials.

Late last year, Xiaomi’s offices were also raided by the Income Tax department, along with fellow Chinese smartphone makers Oppo and OnePlus, on allegations of tax evasion.

A Delhi court summoned Huawei India CEO Li Xiongwei and three other executives on allegations of tax evasion. Huawei also saw its offices raided in February by the I-T department on the same allegations.