Vivo Money Laundering Probe: Delhi HC Quashes Relief Plea Of Chinese National In ED Remand

The Delhi High Court (HC) has dismissed a petition filed by smartphone manufacturer Vivo, which challenged the order that sent its Chinese employee to the Enforcement Directorate (ED) custody. 

A trial court had earlier ordered to send a Chinese national, Guangwen alias Andrew Kuang, to a three-day ED remand in connection with a money laundering case involving the smartphone maker. 

As per news agency PTI, Justice Swarana Kanta Sharma quashed the plea while noting that the Chinese national was involved in incorporating companies for acquiring and syphoning off funds. 

“This court does not find any infirmity in the order of remand dated 10.10.2023 challenged before this Court… the present petition stands dismissed along with (the) pending application,” said the court in its order dated October 13.

The HC also noted that the grounds of arrest point to the Chinese national as the prime conspirator of the money laundering operation, which involved establishing companies that were used to acquire proceeds of the crime. 

Arguing before the HC, the Chinese national’s counsel contended that his arrest was carried out in a ‘malafide manner’ and against the provisions of the PMLA.  

However, the HC rejected the contention saying that the remand application specifically mentioned that the Vivo employee was ‘guilty’ of laundering money based on the probe so far and material collected. 

This comes a week after ED conducted raids at several locations linked to Vivo and several of its associate companies. The agency arrested four executives of the Chinese smartphone maker, including the Chinese national, for flouting money laundering norms. 

At the heart of the matter is a two-year long investigation into Vivo India which probed the allegations that the smartphone maker was escaping its tax liability by making remittances to foreign entities. 

ED claims that the Chinese company allegedly transferred proceeds to the tune of INR 62,476 Cr out of India to avoid tax payments in the country. In the ensuing tussle, the directorate froze the company’s bank account as the company approached courts to seek some respite. 

This comes at a time when a slew of Chinese companies, especially smartphone makers OPPO and Xiaomi, are under the radar of authorities for allegations that span tax evasion and money laundering.