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The Enforcement Directorate has filed its first charge sheet in connection with its money laundering probe against Chinese smartphone maker Vivo-India and some others, official sources said on Thursday.
The prosecution complaint was filed before the court of Special Judge Kiran Gupta in New Delhi on Wednesday under the criminal sections of the Prevention of Money Laundering Act and Vivo-India has been named an accused apart from those arrested in this case, the sources told PTI.
The judge posted the matter for consideration on December 13.
The central probe agency arrested four people, including mobile company Lava International’s MD Hari Om Rai, in October as part of this investigation.
The others who were taken into custody were Chinese national Guangwen alias Andrew Kuang and chartered accountants Nitin Garg and Rajan Malik.
They are in judicial custody at present.
Vivo-India did not respond to an email sent in this regard.
The ED had claimed in its remand papers before a local court here that the alleged activities of the four arrested accused enabled Vivo-India to make wrongful gains that were detrimental to the economic sovereignty of India.
It had raided Vivo-India and its linked persons in July last year, claiming to have busted a major money laundering racket involving Chinese nationals and multiple Indian companies.
The ED had then alleged that a whopping Rs 62,476 crore was “illegally” transferred by Vivo-India to China to avoid payment of taxes in India.
The company had said that it “firmly adheres to its ethical principles and remains dedicated to legal compliance”.
Lava International MD Rai had recently told a court here that though his company and Vivo-India were in talks to launch a joint venture in India a decade ago, he had nothing to do with the Chinese firm or its representatives since 2014.
“He has not derived any monetary benefit, nor has he engaged in any transaction with Vivo-India or any entity allegedly related to Vivo, let alone having been associated with any alleged ‘proceeds of crime’,” Rai’s lawyer had told the court.
The agency filed an enforcement case information report (ECIR), the ED’s equivalent of a police FIR, on February 3 after studying a December 2022 Delhi Police FIR against an associated company of Vivo-India, Grand Prospect International Communication Pvt. Ltd. (GPICPL), its directors, shareholders and some other professionals.
The police complaint was filed by the Corporate Affairs Ministry alleging that GPICPL and its shareholders used “forged” identification documents and “falsified” addresses at the time of incorporation of the company in December 2014.
This company had its registered address in Solan (Himachal Pradesh), Gandhinagar (Gujarat) and Jammu (Jammu and Kashmir).
The three Chinese nationals, mentioned above, incorporated this company while a fourth one, Zhixin Wei, also opened four companies to carry out similar transactions.
“The allegations (made by the Corporate Affairs ministry) were found to be true as the investigation revealed that the addresses mentioned by the directors of GPICPL did not belong to them but in fact, it was a government building and the house of a senior bureaucrat,” the ED said.
It said Vivo Mobiles Pvt. Ltd. was incorporated on August 1, 2014 as a subsidiary of Multi Accord Ltd., a Hong Kong-based company.
The crackdown on the leading Chinese company came after the ED found that three Chinese nationals — all of whom “left” India during 2018-21 — and another person from that country incorporated 23 companies in India in which they were also allegedly helped by CA Nitin Garg.
These 23 companies are found to have transferred huge amounts of funds to Vivo India.
Further, out of the total sale proceeds of Rs 125,185 crore, Vivo India remitted Rs 62,476 crore or almost 50 per cent of the turnover out of India, mainly to China, the ED had alleged.
These remittances, it added, were made in order to “disclose huge losses in Indian incorporated companies to avoid payment of taxes in India”.
The action is seen as part of the Union government’s effort to tighten checks on Chinese entities that are allegedly indulging in serious financial crimes like money laundering and tax evasion while operating in India.
These developments come amid a military stand-off between the two countries along the Line of Actual Control (LAC) in eastern Ladakh that began more than three years ago.
