ED Charges Chinese Company Vivo: 5 Accused Under PMLA, Alleged Revenue Diversion to China

In a significant development, the Enforcement Directorate (ED) has taken decisive steps in the money laundering case involving Chinese corporation Vivo Mobile and four other individuals. The enforcement agency has filed the inaugural chargesheet in a specialized court, citing criminal provisions of the Prevention of Money Laundering Act (PMLA) against the accused.

In a recent update to the ongoing money laundering investigation, the Enforcement Directorate (ED) made notable arrests in October of this year. Among those detained were Chinese national Guangwen Qiang, Hariom Rai, the Managing Director of Lava International, and chartered accountants Rajan Malik and Nitin Garg. The arrests are part of a wider probe into financial irregularities and money laundering activities.

The enforcement action follows a series of events that unfolded about a year ago when the ED conducted searches on Vivo Mobile and its 23 associate companies. The searches spanned 48 locations across the country, signaling the agency’s commitment to a thorough and comprehensive investigation into the financial dealings of the Chinese corporation and its affiliates.

Vivo Accused of Diverting Half Revenue to China to Evade Taxes

The Enforcement Directorate (ED) has leveled serious allegations against Vivo Mobiles India, asserting that the company engaged in unlawful financial practices, including the illegal transfer of funds to China as a tax-saving measure. According to ED’s claims, Vivo Mobiles India established 19 companies in India with the primary objective of facilitating the unauthorized transfer of funds to China.

The Economic Affairs Investigation Agency, in its findings, discovered that Vivo Mobiles India allegedly diverted approximately half of its total sales revenue, amounting to around Rs 1.25 lakh crore. This substantial sum, equivalent to 62,476 crore rupees, was purportedly sent to China in violation of tax regulations.

Investigation Commenced on 3rd February 2022

The Enforcement Directorate (ED) launched an investigation into alleged money laundering on 3rd February 2022, following an FIR filed by the Delhi Police. The case revolves around Vivo’s associate company, Grand Prospect International Communication Private Limited (GPICPL), and involves charges under sections 417, 120B, and 420.

The FIR, registered by the Delhi Police at the Kalkaji Police Station, specifically targets GPICPL, its directors, shareholders, and certified professionals. The charges include offenses related to cheating, criminal conspiracy, and fraud.

Subsidiary of Multi Accord Limited, Registered on 1 August 2014

Vivo Mobiles India Private Limited, according to information provided by the Enforcement Directorate (ED), was incorporated on 1 August 2014. The company operates as a subsidiary of Hong Kong-based Multi Accord Limited and is officially registered at the Registrar of Companies (ROC) in Delhi.

Niyati Rao

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