ED arrests 4 Vivo executives, Lava International MD in money laundering case: Report

The Enforcement Directorate (ED) has arrested four executives of Chinese smartphone company, Vivo Mobiles India including one Chinese citizen in connection with a money laundering case.

A Vivo spokesperson told Business Today, "Vivo firmly adheres to its ethical principles and remains dedicated to legal compliance. The recent arrest deeply concerns us. We will exercise all available legal options."

According to a report in CNBC, apart from these arrests, the ED also arrested the founder of Lava International, Hari Om Rai, for the same case. The details of their alleged money laundering activities are yet to be disclosed.

Last year, ED, under the Prevention of Money Laundering Act, conducted a series of raids across India, including 48 locations. For the unversed, these raids included the premises of Vivo Mobiles India and 23 associated companies, included Grand Prospect International Communications (GPICPL).

Notably, these raids began in February 2022 after an FIR was filed by the Delhi Police. This FIR was filed by the Ministry of Corporate Affairs accusing GPICPL of cheating, fraud and criminal conspiracy.

The ED had alleged that many companies were incorporated in India with the sole purpose of transferring funds to China illegally. It was revealed that Vivo had transferred around half of its sales amounting to Rs 1.25 lakh crore to China, allegedly to avoid paying taxes in India. 

Vivo Mobiles India has repeatedly denied any such allegations and stated that it has cooperated with authorities to provide them with all the required information. Vivo had announced that it was "committed to be fully compliant with laws". 

Investigating this Chinese phone maker is adding to the tensions between Beijing and New Delhi over issues like border disputes and India's increasing scrutiny of Chinese businesses and investment. 

Earlier this April, the ED ordered for seizure of Rs 5,551 crore worth of deposits of leading Chinese smartphone maker, Xiaomi India, for alleged contravention of the Foreign Exchange Management Act.

(The article has been updated after a statement from Vivo)

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