DNA Explainer: What is Vivo PMLA case involving Rs 62,476 crore?
ED action comes almost more than a year after it carried out searches at 48 locations across the country belonging to vivo Mobiles India Private Limited. ED alleges Rs 62,476 crore was "illegally" transferred by Vivo to China in order to avoid payment of taxes in India.
The Enforcement Directorate has detained the MD of Lava International Mobile, a Chinese national, a Chartered Accountant, and another person, according to government sources on Tuesday, as part of its continuing money-laundering investigation against Chinese smartphone maker Vivo,
The ED's move follows searches it conducted at 48 locations nationwide that belonged to vivo Mobiles India Private Limited and its 23 related firms, including Grand Prospect International Communication Pvt Ltd (GPICPL), almost a year ago, according to IANS.
The ED probe had revealed that the PMLA investigation by ED was initiated by registering a money laundering case on February 3, 2022, on the basis of an FIR registered at the Kalkaji police station in the national capital by the Delhi Police under sections 417, 120B and 420 of IPC, 1860 against GPICPL and its Director, shareholders and certifying professionals, etc., on the basis of the complaint filed by the Ministry of Corporate Affairs.
According to the FIR, at the time of incorporation, GPICPL and its shareholders utilized fake identification documents and false addresses. The investigation determined that the addresses provided by the directors of GPICPL were not their own homes, but rather a government building and the residence of a prominent bureaucrat, proving that the accusations were valid.
The four identified as Guangwen Kyang aka Andrew Kuang, the Chinese National; Hari Om Rai, the MD of Lava International; Rajan Malik, and Nitin Garg, the Chartered Accountant (CA) were taken into custody under the provisions of the Prevention of Money Laundering Act (PMLA).
They will likely appear in court, where the ED will ask for their custody.
The agency claimed to have disrupted a significant money laundering operation involving Chinese people and numerous Indian companies when it conducted a raid on the company and others connected to it in July of last year. The agency raided 23 companies connected to Vivo Mobiles India Pvt Ltd on July 5, 2022.
The ED had then said that Vivo "illegally" transported a staggering Rs 62,476 crore to China in order to evade paying taxes in India.
At that time, the ED reported that GPICPL (M/s Grand Prospects International Communication Pvt. Ltd.), a firm connected to Vivo, had its registered offices in Gandhinagar, Jammu, and Solan, Himachal Pradesh. With the assistance of Nitin Garg, a Californian, the aforementioned company was established by Chinese nationals Zhengshen Ou, Bin Lou, and Zhang Jie. Zhengshen Ou and Zhang Jie left India in 2021, while Bin Lou left on April 26, 2018.