Delhi Court Summons Top Vivo Executives In Money Laundering Case

A Delhi court has summoned top leadership of smartphone maker Vivo, including CEO Shen Wei, CFO Chen Yu Fen and India CEO Zhiyong Chen, in connection with an INR 20,241 Cr money laundering case.

The move follows a supplementary chargesheet filed by the Enforcement Directorate (ED). Additional Sessions Judge Kiran Gupta has asked the Vivo executives to appear before the court on May 13, according to a PTI report.

“There is sufficient material available on record and grounds exist for proceeding further,” the court noted.

It concluded that Shen Chen and Zhiyong played pivotal roles in the creation of an elaborate network of companies. They have been accused of arranging the money in an improper way and siphoning it off outside India.

The foreign nationals have also been summoned through the Ministry of Home Affairs in accordance with official protocols, asking them to appear on August 18 under the Prevention of Money Laundering Act (PMLA).

The alleged scam surfaced while the ED was investigating a series of money laundering cases not limited to crypto companies. 

The federal agency raided several locations across the country linked to online travel aggregator EaseMyTrip’s promoter and cofounder Nishant Pitti as part of its probe into the INR 20,000 Cr Mahadev betting case.

On The Vivo Money Trail

The ED had in 2022 filed a money laundering case against a distributor of Vivo Mobile based in Jammu and Kashmir acting on an FIR claiming graft practices in the frenetic rush of Chinese brands to grab a slice of India’s booming smartphone market.

The ED had searched 44 locations across the country following allegations of misappropriation of funds by Vivo and related companies. The investigation revealed that Vivo’s Indian arm had transferred INR 62,476 Cr to avoid tax payments in India. The ED claimed to have seized 119 bank accounts of various entities related with a gross balance to the tune of INR 465 Cr.

A Slew Of Arrests For Money Laundering

The ED arrested four individuals in October 2023, including Hari Om Rai, former managing director of Lava International company, Chinese national Guangwen Kyang, chartered accountant Nitin Garg and another person named Rajan Malik, who were taken into custody for their alleged involvement in the money laundering racket.

The department then reportedly filed a chargesheet in December 2023, where it accused Vivo of siphoning out off INR 1 Lakh Cr from India between 2014 and 2021 through shell companies. 

Three more senior Vivo executives were nabbed later on, including interim India CEO Hong Xuquan alias Terry, CFO Harinder Dahiya and consultant Hemant Munjal.