The country’s financial watchdog, the Enforcement Directorate (ED) today said that it carried out searches at 48 locations of VIVO Mobiles India Private Limited and its 23 associated companies spanning across the country as part of its investigation into possible violations of the Prevention of Money Laundering Act (PMLA) by the Chinese smartphone maker and its partners.
Vivo, a smartphone manufacturer owned by the Chinese company BBK Electronics, is under investigation by the Enforcement Directorate (ED) for alleged money laundering. The investigation has revealed that over a five-year period starting in 2017 and ending in 2021, the Indian division transferred Rs. 62,476 crore to its parent companies in China.
According to the investigation, the firm had a total turnover of almost 1.25 lakh crore during that time. As can be seen, it transferred roughly half of its revenue to its Chinese parent business there.
ED has carried out searches at 48 locations across the country belonging to VIVO Mobiles India Pvt. Ltd. and its 23 associated companies, and seized balance of Rs. 465 Crore lying in 119 bank accounts, including FDs of 66 Crore of Vivo India, 2kg gold bars, and Rs. 73 Lakh cash.
— ED (@dir_ed) July 7, 2022
It is alleged that a limited number of Chinese shareholders in the corporation falsified their identification papers. The ED believes that this alleged forgery was carried out to circumvent Indian laws and regulations by employing shell or paper companies to launder money. Some “proceeds of the crime” may have also been routed overseas or to other businesses.
According to the FIR, M/s GPICPL and its shareholders used fake identification documents and false addresses when they were incorporated. The investigation found that the addresses given by the directors of GPICPL (M/s Grand Prospect International Communication Pvt Ltd) were not their own homes, but rather a government office and the home of a well-known bureaucrat. This proved that the accusations were true.
According to the ED’s investigation, Bin Lou, the director of GPICPL, was once in charge of Vivo. In the years following the incorporation of Vivo in the years 2014–2015, he formed other businesses around the nation in a number of states, totaling 18 businesses at the same time. Additionally, another Chinese national, Zhixin Wei, had formed an additional 4 companies.
In addition, the report noted that 119 bank accounts belonging to various entities have so far had cash amounts totalling roughly Rs. 73 lakhs and FDs worth 66 crores from Vivo India, as well as 2 kg gold bars and a gross balance of Rs. 465 crores seized in accordance with the provisions of the PMLA, 2002.
The press release from ED states that,
All due procedures as per law were followed during the said operations at each premise. The employees of Vivo India, including some Chinese Nationals did not cooperate with the search proceedings and had tried to abscond, remove and hide digital devices which were retrieved by the search teams.