Money laundering probe: ED conducts raids against Vivo, associated companies at 44 places

The Enforcement Directorate (ED) on Tuesday conducted searches at 44 places across the country in a money laundering investigation against Chinese smartphone manufacturing company Vivo and related firms, officials said. The searches are being carried out under sections of the Prevention of Money Laundering Act (PMLA) at locations in several states including in Delhi, Uttar Pradesh, Meghalaya, Maharashtra and others. The agency is conducting searches at 44 places related to Vivo and associated companies, they said.

A query sent by PTI to Vivo did not elicit a response. The news piece will be updated once the company issues a statement. The federal agency 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 few Chinese shareholders in that company forged their identify documents. The ED 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 abroad or put in some other businesses by skirting Indian tax and enforcement agencies.

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The action is being seen as part of the Union government's continued crackdown against Chinese entities and their linked Indian operatives indulging in serious financial crimes like money laundering and tax evasion while operating here. The ED in April ordered for seizure of Rs 5,551 crore worth deposits of Chinese smartphone giant Xiaomi India for alleged contravention of the Foreign Exchange Management Act (FEMA). The Income-tax department raided Chinese telecom company Huawei in February and it claimed to 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. Vivo had 15 per cent market share in the Indian smartphone segment in the first quarter of 2022 with 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.

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