The Enforcement Directorate (ED) has filed a supplementary chargesheet against Vivo China in February, alleging that the company “controlled and monopolized all the operations of Vivo Mobiles in India through Vivo India and its 23 state distributor companies,” according to an exclusive report by the Indian Express. The ED alleges that the company siphoned off Rs 70,000 crore from India “under the garb of imports.”
According to the report in Indian Express, the central probe agency alleges Vivo Mobile Pvt Ltd remitted Rs 70,837 crore outside India since 2014, for imports from entities based in Hong Kong, Samoa and British Virgin Islands. These entities, the ED alleges, were controlled by Vivo China and the proceeds from the imports were close to Rs 20,241 crore. The ED further alleges that Vivo China tried to conceal its relationship with Vivo India by distancing itself on paper, but continued to control the supply chain. The ED says “all the companies were controlled and owned by one master – Vivo China.”
The central probe agency said Vivo China set up special purpose vehicles (SPVs) in other countries, in which it had stakes through other companies. For example, Vivo Mobile India was registered as a subsidiary of Multi Accord Limited in Hong Kong. Vivo China was a stakeholder in Lucky Crest, another Hong Kong-registered entity, that was in turn a shareholder of Multi Accord. Through this elaborate web, the ED alleges, that Vivo China controlled Vivo India.
Also read: ED arrests 3 more in money laundering case against Vivo-India, others
The chargesheet says that Vivo India and its 23 SDCs “wilfully misdeclared” its beneficial ownership to the Indian government. The trading companies operated out of Yip Fung Building in Hong Kong. The ED says Vivo China used an Indian company called Labquest Engineering as a “front to carry out retail business activities,” which violated India’s FDI policy.
In December 2023, the ED had arrested seven people in connection with a money-laundering probe against Vivo India.
