ED conducts raids against Vivo, related companies in money laundering probe

PTI | | Updated on: Jul 06, 2022

The searches are being carried out under sections of the Prevention of Money Laundering Act

The Enforcement Directorate (ED) raided at least 44 places across the country on Tuesday in a money-laundering investigation against Chinese smartphone manufacturer Vivo and related firms, officials said.

The searches were carried out under sections of the Prevention of Money Laundering Act (PMLA) at locations in several states including Delhi, Uttar Pradesh, Meghalaya and Maharashtra.

A Vivo India spokesperson said they are cooperating with authorities.

"Vivo is cooperating with the authorities to provide them with all required information. As a responsible corporate, we are committed to be fully compliant with laws," the spokesperson said.

The agency was conducting searches at 44 places related to Vivo and associated companies, the officials said.

The federal agency filed a money laundering case after taking cognisance of a recent Delhi Police (economic offences wing) FIR against a distributor of the agency based in Jammu and Kashmir where it was alleged that a few Chinese shareholders in that company forged their identity documents.

The ED suspects this alleged forgery was done to launder illegally generated funds using shell or paper companies and some of these "proceeds of crime" were diverted to stay under the radar of Indian tax and enforcement agencies.

The action is being seen as part of the Union government's steps to tighten checks on Chinese entities and the continued crackdown on such firms and their linked Indian operatives that are allegedly indulging in serious financial crimes like money laundering and tax evasion while operating here.

The stepped-up action against the Chinese-backed companies or entities operating in India comes in the backdrop of the military stand-off between the two countries along the Line of Actual Control (LAC) in eastern Ladakh that is on for more than two years now.

The ED in April ordered the seizure of ₹5,551 crore worth of deposits of Chinese smartphone giant Xiaomi India for alleged contravention of the Foreign Exchange Management Act (FEMA).

The Income-tax department raided Chinese telecom company Huawei in February and it claimed to found alleged manipulation of account books for reducing taxable income in India by the company.

Premises of a number of these Chinese smartphone companies including Xiaomi, Oppo and Vivo, their distributors and linked associates were raided across the country by the I-T department in December last year and it later claimed to have detected alleged unaccounted income worth over ₹6,500 crore due to violation of the Indian tax law and regulations. Vivo had a 15 per cent market share in the Indian smartphone segment in the first quarter of 2022 with the shipment of 5.5 million devices, according to market research and analysis firm IDC.

According to a Counterpoint research report, Vivo became the top 5G brand in the ₹10,000-20,000 price bracket segment in the country during March 2022 quarter.

Published on July 05, 2022
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