Sat. Oct 1st, 2022

Vivo, a smartphone manufacturer, allegedly “illegally” transferred a staggering Rs 62,476 crore to China in order to avoid paying taxes in India, according to the Enforcement Directorate, which announced its discovery of a massive money-laundering ring involving Chinese nationals and numerous Indian businesses on Thursday.

It stated that this amount represents nearly half of Vivo’s annual revenue of Rs. 1,25,185 crore without specifying the exact frame of the transaction.

The federal investigation agency discovered that three Chinese nationals—all of whom “left” India between the years 2018–21—and another individual from that nation formed up to 23 firms in India with the assistance of Chartered Accountant Nitin Garg.

One of the foreigners, who went under the name of Bin Lou, was a former Vivo director who, in accordance with the ED, departed India in April 2018. According to the report, Zhengshen Ou and Zhang Jie were two more who fled the nation in 2021.

“It has been discovered that these (23) firms transferred substantial sums of money to Vivo India. Additionally, Vivo India transferred Rs. 62,476 crore, or nearly 50% of the entire revenue, out of India, primarily to China, from the total selling revenues of Rs. 1,25,185 crore, the ED stated in a statement.

In order to avoid paying taxes in India, it was stated that these transactions were done in order to “disclose substantial losses in Indian incorporated corporations.

The move is being viewed as a component of the Union government’s efforts to strengthen controls over Chinese entities and the ongoing crackdown on such businesses and their affiliated Indian operatives who are allegedly engaging in serious financial crimes like money laundering and tax evasion while operating here.

In the background of the prolonged military standoff between the two nations along the Line of Actual Control (LAC) in eastern Ladakh for more than two years, more action has been taken against Chinese-backed businesses or organisations operating in India.

The announcement followed 48 raids by the ED on Vivo Mobiles India Pvt. Ltd. and related businesses on July 5 across the nation.

Vivo had stated on Tuesday that it was “dedicated to be completely compliant with legislation as a responsible business entity.” The agency claimed that even though “all due procedures as per law” were followed during the raids carried out in accordance with the criminal provisions of the Prevention of Money Laundering Act (PMLA), “employees of Vivo India, including some Chinese nationals, did not cooperate with the search proceedings and tried to abscond, remove, and hide digital devices which were retrieved by the search teams,” it claimed. Indian intelligence officials recently discovered that Chinese corporations were “illegally” transferring local consumers’ data to servers located there.

Various entities connected in the investigation have monies totaling Rs. 465 crore stored in 119 bank accounts, according to the ED, along with Rs. 73 lakh in cash and 2 kilogramme of gold bars.

After reviewing a Delhi Police FIR (registered at Kalkaji police station) from December of last year against Grand Prospect International Communication Pvt Ltd (GPICPL), its directors, shareholders, and some other professionals, the agency filed an Enforcement Case Information Report (ECIR), the ED equivalent of a police FIR, on February 3. The Ministry of Corporate Affairs filed a police report saying that, during the company’s December 2014 establishment, GPICPL and its shareholders used “falsified” addresses and “forged” identification papers.

This business has addresses in Jammu, Gujarat, and Himachal Pradesh, including Solan (J&K). The three Chinese nationals previously stated established this corporation, and a fourth, Zhixin Wei, also set up four other businesses to conduct identical business.

According to the ED, “The locations indicated by the directors of GPICPL did not belong to them, but it was a government building and the home of a prominent bureaucrat, therefore the inquiry confirmed that the charges (made by the ministry) were accurate.”

Vivo Mobiles Pvt Ltd, a subsidiary of Multi Accord Ltd, a Hong Kong-based business, was established on August 1, 2014, according to the statement.

The ED identified the other 22 companies as: Rui Chuang Technologies Pvt Ltd (Ahmedabad), V Dream Technology & Communication Pvt Ltd (Hyderabad), Regenvo Mobile Pvt Ltd (Lucknow), Fangs Technology Pvt Ltd (Chennai), Weiwo Communication Pvt Ltd (Bangalore), Bubugao Communication Pvt Ltd (Jaipur), Haicheng Mobile (India) Pvt Ltd (Delhi), Joinmay Mumbai Electronics Pvt. Ltd (Mumbai), Yingjia Communication Pvt Ltd (Kolkata) and Jie Lian Mobile India Pvt. Ltd. (Indore). The rest are Vigour Mobile India Pvt Ltd (Gurugram), Hisoa Electronic Pvt Ltd (Pune), Haijin Trade India Pvt Ltd (Kochi), Rongsheng Mobile India Pvt Ltd (Guwahati), Morefun Communication Pvt Ltd (Patna), Aohua Mobile India Pvt Ltd (Raipur), Pioneer Mobile Pvt Ltd (Bhubaneswar), Unimay Electronic Pvt Ltd (Nagpur), Junwei Electronic Pvt Ltd (Aurangabad), Huijin Electronic India Pvt Ltd (Ranchi), MGM Sales Pvt Ltd (Dehradun) and Joinmay Electronic Pvt Ltd (Mumbai).

By adele rose

Adele Rose is the senior editor and employee of WGBS Pvt Ltd Digital wing.

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