Vivo is a famous smartphone maker that caters to customers’ needs by introducing devices in various price brackets. Recently, the company has been named in controversy after reports claimed that Vivo has ‘illegally’ transferred INR 62,476 crore to China to avoid paying taxes in India.
Vivo illegally transferred funds
According to the Enforcement Directorate, the Indian arm of the company did this to disclose huge losses in Indian incorporated companies to avoid paying taxes. Following this, the agency blocked 119 bank accounts linked to Vivo India. These accounts held Rs 465 crore, and other assets seized include Rs 73 lakh cash, and 2 kg gold bars, and an investigation is going on in the matter.
The ED claims to have caught a major money laundering racket involving Chinese nationals and many Indian companies. This came after the federal agency found that three Chinese nationals and one Indian left the country during 2018-21 and incorporated 23 companies in India.
A Chartered Accountant named Nitin Garg was also involved, and the group forged documents while integrating these companies. The addresses mentioned in the papers were not listed under their names but were the house of a senior bureaucrat and a government building.
Among the foreigners, one was an ex-director of Vivo named Bin Lou, who left India in 2018. The other two, Zhang Jie and Zhengshen Ou made their way out in 2021.
No cooperation during the investigation
Vivo has claimed that it was committed to following the rules and regulations of the country; meanwhile, it is ‘alleged’ that the company employees tried to remove and hide digital devices during the investigation. The search teams eventually retrieved these gadgets.
China commented on the matter, stating that it expected India to conduct the investigation against Vivo fairly and to provide a ‘non-discriminatory’ business environment to the firms in the country.
This probe is part of a more extensive effort by the government to tighten checks on Chinese companies operating in India who have been accused of financial crimes. Before this, the ED ordered to seize Rs 5,551 crore of deposits of Xiaomi India in April, which was charged with violating foreign exchange rules.