New Delhi: A day after it was reported that two top executives of its associated company likely fled India, following raids, the ED on Thursday said that Chinese smartphone company Vivo was involved in huge ‘hawala’ transactions.
It said that out of the total sale proceeds of Rs 1,25,185 crore, Vivo India remitted Rs 62,476 crore — almost 50 per cent of the turnover out of India, mainly to China.
A senior ED official said that they carried out searches at 48 locations across the country belonging to Vivo Mobiles India Private Ltd and its 23 associated companies such as Grand Prospect International Communication Pvt Ltd (GPICPL), and so far, 119 bank accounts of various entities with gross balance to the tune of Rs 465 crore, including FDs to the tune of 66 crore, of Vivo India, 2 kg gold bars, and cash amounting to approximately Rs 73 lakh has been seized under the provisions of the PMLA.
According to the ED, all due procedures as per law were followed during the said operations at each premises but employees of Vivo India, including some Chinese nationals did not cooperate with the search proceedings and had tried to abscond, remove and hide digital devices which were retrieved by the search teams.
Vivo Mobiles India Pvt Ltd was incorporated on August 1, 2014 as a subsidiary of Hong Kong-based Multi Accord Ltd, and was registered at ROC Delhi. The GPICPL was registered on December 3, 2014 at ROC Shimla, with registered addresses of Solan, Himachal Pradesh and Jammu.
The said company was incorporated by Zhengshen Ou, Bin Lou and Zhang Jie with the help of chartered accountant Nitin Garg.
Lou left India on April 26, 2018 whereas Ou and Jie left India in 2021.
In February this year, the ED initiated a Prevention of Money Laundering case against them on the basis of an FIR lodged at Delhi’s Kalkaji police station under sections 417, 120B and 420 of IPC against GPICPL and its Director, shareholders and certifying professionals etc on the basis of complaint filed by Ministry of Corporate Affairs.
As per the FIR, GPICPL and its shareholders had used forged identification documents and falsified addresses at the time of incorporation. The allegations were found to be true as the investigation revealed that the addresses mentioned by the directors of GPICPL did not belong to them, but in fact it was a government building and house of a senior bureaucrat.
The ED’s investigation revealed that the same director of GPICPL, Lou, was also an ex-director of Vivo. He had incorporated multiple companies across the country spread across various states. A total of 18 companies were set up around the same time, just after the incorporation of Vivo in 2014-15, while another Chinese national Zhixin Wei had incorporated further 4 companies.
These entities include Rui Chuang Technologies Private Ltd (Ahmedabad), V Dream Technology & Communication Private Ltd (Hyderabad), Regenvo Mobile Private Ltd (Lucknow), Fangs Technology Private Ltd (Chennai), Weiwo Communication Private Ltd (Bengaluru), Bubugao Communication Private Ltd (Jaipur), Haicheng Mobile (India) Private Ltd (New Delhi), Joinmay Mumbai Electronics Private Ltd (Mumbai), Yingjia Communication Private Ltd (Kolkata), Jie Lian Mobile India Private Ltd (Indore), Vigour Mobile India Private Ltd (Gurugram), Hisoa Electronic Private Ltd (Pune), Haijin Trade India Private Ltd (Kochi), Rongsheng Mobile India Private Ltd (Guwahati), Morefun Communication Private Ltd (Patna), and several others, the ED said.
These companies were found to have transferred huge amounts of funds to Vivo India, which remitted them out of India, mainly to China.
These remittances were made in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India, the ED said.