SUMMARY
The chargesheet was filed under the provisions of the PMLA and also names 23 other associate companies, including Lava International
This comes months after four individuals, including a Chinese national, were arrested for helping Vivo accumulate alleged wrongful profits
Vivo India is at the centre of an ED probe for allegedly illegally transferring over INR 60,000 Cr to its Chinese entity to avoid paying taxes in India
The Enforcement Directorate (ED) on Wednesday (December 7) reportedly filed a chargesheet against Chinese smartphone maker Vivo in connection with a money laundering case.
According to news agency PTI, the chargesheet was filed under the provisions of the Prevention of Money Laundering Act (PMLA) and also names 23 other associate companies, including Lava International.
The Hindu Business Line (HBL) reported, citing the chargesheet, that Vivo allegedly diverted proceeds of nearly INR 1 Lakh Cr from India to overseas through shell companies.
The development comes weeks after a Delhi court extended the judicial custody of four accused arrested in the case. The accused include Lava International managing director Hari Om Rai, a Chinese national Guangwen, and chartered accountants Nitin Garg and Rajan Malik.
The four were arrested on the grounds of undertaking activities that helped the Chinese smartphone manufacturer accumulate alleged wrongful profits in detriment to India’s economic sovereignty.
As per the Hindu Business Line, the Chinese national allegedly floated around 19 shell companies that ‘rinsed money’ earned out of business activities in India and then syphoned it out of the country.
It is pertinent to note that Vivo India had challenged the order of the Delhi High Court that sent the Chinese national to ED’s custody. However Justice Swarana Kanta Sharma quashed the plea noting that the Chinese national was involved in incorporating companies for acquiring and syphoning off funds.
The ED commenced the investigation against Vivo India in 2021 suspecting that the company had illegally transferred more than INR 60,000 Cr to its Chinese entity to avoid paying taxes in India. Vivo, however, denied the allegations.
Subsequently, the ED raided 48 premises linked to Vivo in July last year for suspected money laundering. Back then, the ED claimed that Vivo allegedly transferred proceeds to the tune of INR 62,476 Cr out of India to avoid tax payments in the country. To top it off, the government also put a halt to the export of 27,000 Vivo phones from India worth $15 Mn.
