In a significant development in the ongoing money laundering investigation against Chinese smartphone company Vivo, the Enforcement Directorate (ED) has arrested three high-ranking executives of the company. The arrests, which took place on Saturday (23rd December) come after a long investigation.
The arrested individuals include Hong Xuquan, also known as Terry, who is the Interim CEO of Vivo India, Harinder Dahiya, the Chief Financial Officer (CFO), and Hemant Munjal, a consultant. These arrests have been made under the provisions of the Prevention of Money Laundering Act (PMLA). The accused were presented before a court, which remanded them to ED custody for three days.
This latest action by the ED follows the earlier arrests of four individuals associated with the case. These include Hari Om Rai, the Managing Director of Lava International, a competing mobile company; Guangwen, also known as Andrew Kuang, a Chinese national; and two chartered accountants, Nitin Garg and Rajan Malik. All four are currently in judicial custody. The ED had presented a charge sheet against these four individuals before a special PMLA court in Delhi. The court acknowledged and took note of the charge sheet.
The ED’s investigation has brought to light allegations of a significant financial subterfuge orchestrated by Vivo. Reports suggest that the company siphoned off a staggering Rs 1 lakh crore from India between 2014 and 2021. This was allegedly facilitated through a network of shell companies, purportedly established at the behest of Vivo’s Chinese parent company Vivo Mobile Communication Co. These shell entities, numbering 19, were set up to create an elaborate front, allowing Vivo to gain a stronghold in India violating foreign direct investment rules.
Further, the ED’s probe unearthed that Vivo India had remitted nearly Rs 62476 crore to China, constituting almost 50% of its turnover, ostensibly to avoid taxes in India. This has raised serious concerns about the economic sovereignty of India.
The agency’s investigation also revealed a pattern of alleged deceit involving the use of forged documents and falsified addresses. One of the companies under scrutiny, Grand Prospect International Communication Pvt. Ltd. (GPICPL), reportedly used government buildings and a senior bureaucrat’s house as its registered addresses.
The matter has drawn significant attention, considering the scale of the alleged financial irregularities and their implications on India’s economic interests. The case continues to unfold as the ED delves deeper into the intricate web of transactions and corporate structures set up by Vivo and its associates.
