The Enforcement Directorate arrested four senior officials of Vivo India on Tuesday, a CNBC-TV-18 report said. The report further added that a Chinese citizen is also among those were arrested on Tuesday. The arrests come after the probe agency carried out searches at the company’s premises in July earlier this year.
The probe began on February 23, 2022 based on a Delhi Police’s FIR. The FIR was filed against GPICPL based on the Corporation Affairs Ministry’s complaint. The FIR alleges GPICPL of fraud, cheating and criminal conspiracy.
The ED claims that multiple ‘Cost of Sales’ were incorporated in India to transfer money to China and that Vivo India transferred half of sale proceeds of Rs 1.25 lakh crore to China in order to evade taxes.
Increased scrutiny of Chinese companies escalated following border tensions between the two nations in 2020, resulting in numerous rounds of discussions. Subsequently, over 200 mobile applications, including TikTok, have been prohibited.
Raids were carried out in various regions, including Delhi, Uttar Pradesh, Meghalaya, Maharashtra, Madhya Pradesh, and southern states. It’s worth noting that this development occurred two months after the federal agency seized Rs 5,571 crore from Xiaomi India.
Over the past two years, the government has intensified its actions against Chinese companies and their funded entities, alleging financial misconduct such as money laundering and tax evasion during their operations in India. These escalated actions are also seen as a direct outcome of the ongoing two-year standoff between China and India along the Line of Actual Control (LAC) in Eastern Ladakh, as well as the clashes in the Galwan Valley between the two countries.
This is not the first instance where Vivo has attracted the attention of government agencies. In 2021, the company, along with its Chinese counterparts Xiaomi and Oppo, and their respective distributors, underwent investigations by the Income Tax (I-T) Department in more than 25 cities across India, including Delhi, Mumbai, Chennai, Bengaluru, Kolkata, and Guwahati. The investigation uncovered alleged tax evasion by these companies on income exceeding Rs 6,500 crore.