The Enforcement Directorate (ED) has submitted a charge sheet in its money laundering investigation into Chinese phone maker Vivo, alleging illicit remittances of ₹1 lakh crore from 2014 to 2021 through shell companies. Filed in a Delhi special court, the charge sheet includes figures like Hari Om Rai of Lava International, accused of aiding Vivo, Chinese national Guangwen Kyang (Andrew Kuang), Nitin Garg (Vivo’s chartered accountant), and Rajan Malik (Lava’s statutory auditor). The Prevention of Money Laundering Act (PMLA) charges apply, naming Vivo as an accused.
Initiated in 2022, the probe by ED exposed Vivo’s incorporation of 19 additional companies in India post-2014, featuring Chinese directors and shareholders. These entities controlled Vivo Mobiles’ complete supply chain. Vivo allegedly exploited the 2014-15 FDI policy, allowing 100% foreign investment in single-brand retail via the government route. However, for wholesale cash and carry business, 100% FDI under the automatic route required no government approval.
To sidestep approval and conceal ownership, Vivo allegedly entered India under the guise of wholesale cash and carry business, per ED’s statement from October. Raids on Vivo’s offices occurred in July the previous year.
The money laundering investigation disclosed that Vivo routed over ₹1 lakh crore abroad, engaging “trading companies” to obscure control from government notice. These revelations showcase a complex scheme involving shell entities, foreign nationals, and manipulation of FDI policies.
This development adds to the growing scrutiny on foreign companies operating in India, emphasizing the need for stringent monitoring and compliance with financial regulations to thwart illicit financial activities.
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