A whopping Rs 62,476 crore has been “illegally” transferred by smartphone maker Vivo to China so as to keep away from cost of taxes in India, the Enforcement Directorate mentioned Thursday, because it claimed to have busted a serious cash laundering racket involving Chinese language nationals and a number of Indian firms.
This cash is sort of half ofturnover of Rs. 1,25,185 crore, it mentioned with out stating the time interval of the transaction.
The crackdown on the main Chinese language firm got here after the federal probe company discovered that three Chinese language nationals, all of whom “left” India throughout 2018-21, and one different individual from that nation integrated as many as 23 firms in India by which they had been additionally helped by a Chartered Accountant, Nitin Garg.
Among the many foreigners, one recognized as Bin Lou was an ex-director of Vivo and, in accordance with the ED, he left India in April, 2018. Two others — Zhengshen Ou and Zhang Jie — left the nation in 2021, it mentioned.
“These (23) firms are discovered to have transferred large quantities of funds to Vivo India. Additional, out of the entire sale proceeds of Rs. 1,25,185 crore, Vivo India remitted Rs. 62,476 crore or nearly 50 per cent of the turnover out of India, primarily to China,” the ED mentioned in a press release.
These remittances, it added, had been made so as to “disclose large losses in Indian integrated firms to keep away from cost of taxes in India.” The motion is being seen as a part of the Union authorities’s steps to tighten checks on Chinese language entities and the continued crackdown on such corporations and their linked Indian operatives which can be allegedly indulging in severe monetary crimes like cash laundering and tax evasion whereas working right here.
The stepped-up motion towards the Chinese language-backed firms or entities working in India comes within the backdrop of the army stand-off between the 2 international locations alongside the Line of Precise Management (LAC) in japanese Ladakh that has been ongoing for greater than two years now.
The assertion got here after the ED raided 48 areas of Vivo Mobiles India Pvt. Ltd. and its related firms throughout the nation on July 5.
Vivo had mentioned on Tuesday that “as a accountable company, we’re dedicated to be absolutely compliant with legal guidelines.” The company mentioned whereas it adopted “all due procedures as per regulation” throughout the raids carried out underneath the legal sections of the Prevention of Cash Laundering Act (PMLA), it alleged “staff of Vivo India, together with some Chinese language nationals, didn’t cooperate with the search proceedings and tried to abscond, take away and conceal digital gadgets which had been retrieved by the search groups.” Not too long ago, Indian intelligence companies had discovered that the info of home prospects was being “illegally” transferred by Chinese language firms to servers saved in that nation.
The ED additionally mentioned submit the raids, it seized funds price Rs. 465 crore saved in 119 financial institution accounts by varied entities concerned within the case, Rs. 73 lakh money and 2kg gold bars.
The company filed an Enforcement Case Info Report (ECIR), the ED equal of a police FIR, on February 3 after learning a Delhi Police FIR (registered at Kalkaji police station) of December final yr towards a related firm of Vivo, Grand Prospect Worldwide Communication Pvt Ltd (GPICPL), its administrators, shareholders and a few others professionals.
The police grievance was filed by the Ministry of Company Affairs alleging that GPICPL and its shareholders used “cast” identification paperwork and “falsified” addresses on the time of incorporation of the corporate in December, 2014.
This firm had its registered deal with in Solan (Himachal Pradesh), Gandhinagar (Gujarat) and Jammu (J&Ok). The three Chinese language nationals, talked about above, integrated this firm whereas a fourth one, Zhixin Wei, additionally opened 4 firms to hold out related transactions.
“The allegations (made by the ministry) had been discovered to be true because the investigation revealed that the addresses talked about by the administrators of GPICPL didn’t belong to them, however in reality it was a authorities constructing and home of a senior bureaucrat,” the ED mentioned.
It mentioned Vivo Mobiles Pvt Ltd was integrated on August 1, 2014 as a subsidiary of Multi Accord Ltd, a Hong Kong-based firm.
The ED recognized the opposite 22 firms as: Rui Chuang Applied sciences Pvt Ltd (Ahmedabad), V Dream Expertise & Communication Pvt Ltd (Hyderabad), Regenvo Cellular Pvt Ltd (Lucknow), Fangs Expertise Pvt Ltd (Chennai), Weiwo Communication Pvt Ltd (Bangalore), Bubugao Communication Pvt Ltd (Jaipur), Haicheng Cellular (India) Pvt Ltd (Delhi), Joinmay Mumbai Electronics Pvt. Ltd (Mumbai), Yingjia Communication Pvt Ltd (Kolkata) and Jie Lian Cellular India Pvt. Ltd. (Indore).
The remainder are Vigour Cellular India Pvt Ltd (Gurugram), Hisoa Digital Pvt Ltd (Pune), Haijin Commerce India Pvt Ltd (Kochi), Rongsheng Cellular India Pvt Ltd (Guwahati), Morefun Communication Pvt Ltd (Patna), Aohua Cellular India Pvt Ltd (Raipur), Pioneer Cellular Pvt Ltd (Bhubaneswar), Unimay Digital Pvt Ltd (Nagpur), Junwei Digital Pvt Ltd (Aurangabad), Huijin Digital India Pvt Ltd (Ranchi), MGM Gross sales Pvt Ltd (Dehradun) and Joinmay Digital Pvt Ltd (Mumbai).