The Enforcement Directorate (ED) on Tuesday searched at least 44 premises across the country in a money-laundering investigation against Chinese smartphone manufacturer Vivo and related entities.
The searches were carried out under the Prevention of Money Laundering Act (PMLA) at locations in several States including Delhi, Uttar Pradesh, Meghalaya and Maharashtra, officials said.
The ED 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 agency 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 evade the scrutiny of Indian tax and enforcement agencies, they said.
The action comes in the wake of Centre’s bid 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 scrutiny 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.
In April, the ED ordered the seizure of Rs 5,551 crore worth of deposits of another Chinese smartphone giant Xiaomi India for alleged contravention of the Foreign Exchange Management Act (FEMA).
The Income-Tax Department searched Chinese telecom company Huawei in February and it claimed to have 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 Rs 6,500 crore due to violation of the Indian tax law and regulations. According to reports, a number of Chinese entities are linked to the Chinese PLA, posing a threat to the security in the country they operate. Vivo had a 15 percent 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 Rs 10,000-20,000 price bracket segment in the country during March 2022 quarter. A Vivo India spokesperson said, "Vivo is cooperating with authorities to provide them with all required information. As a responsible corporate, we are committed to be fully compliant with laws."