ED arrests high-ranking Vivo, Lava execs including one Chinese national in money laundering case

The Enforcement Directorate or the ED, arrested four executives from Vivo Mobiles India, a Chinese mobile manufacturer, as part of their ongoing investigation into suspected money laundering activities. Among those arrested was a Chinese citizen. In a related development, Hari Om Rai, the Founder of Lava International, has also been apprehended in connection with the ED’s actions. Specific details regarding his involvement have not yet been disclosed. This enforcement action follows a series of raids conducted across India in the preceding year, covering 48 locations. These raids encompassed the premises of Vivo Mobiles India and 23 affiliated companies, including Grand Prospect International Communications (GPICPL). The ED’s investigation, conducted under the Prevention of Money Laundering Act (PMLA), was initiated on February 3, 2022, following the filing of an FIR by the Delhi Police. The FIR was lodged in response to a complaint filed by the Ministry of Corporate Affairs, which accused GPICPL of engaging in fraudulent activities, cheating, and criminal conspiracy. The ED asserts that several companies were established in India with the primary objective of engaging in unauthorized fund transfers to China. Additionally, the ongoing investigation has unveiled that Vivo Mobiles India allegedly transferred a significant portion, approximately half of its total sales proceeds amounting to Rs. 1.25 lakh crore, to China. This purportedly occurred with the intent of evading taxes within India. The company has repeatedly denied the allegations. It has previously said it cooperated with authorities to provide them with all required information and was “committed to be fully compliant with laws.” Vivo is owned by China’s BBK Electronics, which also operates brands such as Oppo and Realme in India. Vivo is the second biggest smartphone brand in India with a 17 per cent market share in shipments, trailing behind Samsung, according to data from research firm Counterpoint. The first source said Vivo executives were summoned to the ED’s Delhi office for questioning, and then arrested. They will appear in court later on Tuesday, the person added. In 2022, the ED blocked 119 bank accounts linked to Vivo’s India business, but a court later revoked the move. In the case, the ED alleged Vivo India transferred 624 billion rupees ($7.5 billion) to China illegally to “disclose huge losses” in India to avoid payment of taxes. Indian police also have formally accused Vivo of helping transfer funds illegally to a news portal under investigation on charges of spreading Chinese propaganda, Reuters reported last week. Vivo hasn’t commented on the matter. Relations between India and China have increasingly soured since a 2020 military clash on their disputed Himalayan border in which 20 Indian soldiers and four Chinese troops were killed. Since then, India has banned hundreds of Chinese apps including TikTok, citing national security concerns and tightened scrutiny of incoming investments from its neighbour. (With input from agencies)