ED says Vivo officials committed visa violations, visited 'sensitive' J&K

The Enforcement Directorate (ED) on Thursday said that Chinese smartphone maker Vivo officials breached rules of their business visas by visiting the "sensitive" Jammu and Kashmir. A court filing by the government probing agency stated that at least 30 Chinese individuals entered India on business visas and worked as Vivo employees, but their application forms "never disclosed" that the firm was their employer.

"Various Chinese nationals have been traveling across India, including sensitive places of Jammu and Kashmir and Ladakh, in gross violation of Indian visa conditions," it added, shedding light for the first time on the alleged offences.

On Tuesday, ED arrested four persons, including a Chinese National and the managing director of Lava International mobile company, in connection with a money laundering probe against smartphone maker Vivo, which has a market share of 17 per cent in India.

In its remand application submitted on Tuesday, the ED said that the accused had cheated the government by entering India in a “disguised and fraudulent manner" to set up an elaborate Chinese-controlled network throughout the country… carrying out activities prejudicial to the economic sovereignty of India.

The four arrested — Hari Om Rai, MD, Lava International Company, Chinese national Andrew Kuang, and chartered accountants Nitin Garg and Rajan Malik — were sent to three-day ED custody by Additional Sessions Judge Devender Kumar Jangala.

According to the ED, its investigation revealed that “huge sums were siphoned out of India”.

"Many employees of Vivo group companies worked in India without appropriate visas," the agency said in the filing.

"They have concealed information regarding their employer in their visa applications and cheated the Indian embassy or missions in China."

The ED also accused Vivo of violations of FDI norms by Vivo between 2014 and 2018. It said that since wholesale cash and carry businesses don’t require government approval under the 100 per cent automatic FDI route, Vivo masked its wholesale cash and carry business and concealed its ownership. 

The probe agency found out during its investigation that remittances over Rs 1 lakh crore were allegedly transferred outside India to “trading companies” so that Vivo couldn’t be noticed by the government of India. It was noted by the agency that zero profits were shown from 2014 to 2020 and no income taxes were paid in India. 

The ED initiated the probe after the Corporate Affairs Ministry lodged a complaint alleging that Grand Prospect International Communications (GPICPL) and its shareholders used “forged” identification documents and fake addresses at the time of its incorporation in 2014.

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 GPICPL.

In July 2022, the ED had conducted raids at Vivo offices in relation to money laundering offences. Following that, the ED had alleged that Rs 62,476 crore was “illegally” transferred by Vivo to China in order to avoid payment of taxes in India. These transfers, according to the ED, were made to show losses and to avoid paying taxes in India.

(With agency inputs)