The remittances were allegedly made in order to disclose huge losses in Indian incorporated companies

The Enforcement Directorate has seized 119 bank accounts of various entities with Rs 465 crore including fixed deposits to the tune of 66 crores of Vivo India after conducting searches at 48 locations across the country. According to ED, Vivo India remitted Rs 62,476 crores (almost 50% of the turnover out of India) to China.

These remittances were allegedly made in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India.

The financial probe agency had conducted searches at locations linked to VIVO Mobiles India Private Limited and its 23 associated companies such as Grand Prospect International Communication Pvt Ltd (GPICPL).

The ED has also seized two kilograms gold bars and Rs 73 lakh in cash under the prevention of money laundering act (PMLA).

Vivo Mobiles India Pvt Ltd was incorporated on August 1, 2014 as a subsidiary of Multi Accord Ltd, a Hong Kong-based company and was registered in Delhi. GPICPL was registered on December 3, 2014 at Shimla, with registered addresses of Solan, Himachal Pradesh and Gandhinagar, Jammu.

GPICPL was incorporated by Chinese nationals – Zhengshen Ou, Bin Lou and Zhang Jie with the help of a chartered accountant, Nitin Garg. Interestingly, Bin Lou left India on April 26, 2018, whereas Zhengshen Ou and Zhang Jie left India in 2021.

The ED filed a case in February 2022 on the basis of an FIR registered by Delhi Police in December 2021 against GPICPL, its directors, shareholders and certifying professionals on the basis of complaint filed by the Ministry of Corporate Affairs.

According to 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,” ED said in a statement.

ED has alleged that Bin Lou, Director of GPICPL was also an ex-director of Vivo. He had incorporated multiple companies across the country spread across various states, a total of 18 companies around the same time, just after the incorporation of Vivo in the year 2014-15.

“Further, another Chinese National Zhixin Wei had incorporated four companies. These entities are Rui Chuang Technologies Private Limited (Ahmedabad), V Dream Technology & Communication Private Ltd (Hyderabad), Regenvo Mobile Private Limited (Lucknow), Fangs Technology Private Limited (Chennai), Weiwo Communication Private Limited (Bangalore), Bubugao Communication Private Limited (Jaipur), Haicheng Mobile (India) Private Limited (New Delhi), Joinmay Mumbai Electronics Pvt. Ltd (Mumbai), Yingjia Communication Private Limited (Kolkata), Jie Lian Mobile India Pvt. Ltd. (Indore), Vigour Mobile India Private Limited (Gurgaon), Hisoa Electronic Private Limited (Pune), Haijin Trade India Private Limited (Kochi), Rongsheng Mobile India Private Limited (Guwahati), Morefun Communication Private Limited (Patna), Aohua Mobile India Private Limited (Raipur), Pioneer Mobile Private Limited (Bhubhaneswar), Unimay Electronic Private Limited (Nagpur), Junwei Electronic Private Limited (Aurangabad), Huijin Electronic India Private Limited (Ranchi), MGM Sales Private Limited (Dehradun) and Joinmay Electronic Pvt Ltd (Mumbai),” the statement added.

According to the probe agency, these companies are found to have transferred huge amount of funds to Vivo India.

“Further, out of the total sale proceeds of Rs. 1,25,185 crores, Vivo India remitted Rs. 62,476 crores, almost 50% of the turnover 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,” added the ED.

The ED has alleged that the 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.

In a response to the searches on Vivo India, the Spokesperson of Chinese Embassy in India said in a statement, “We hope the Indian side will abide by laws as they carry out investigation & enforcement activities & provide a truly fair, just & non-discriminatory business environment for Chinese companies investing & operating in India.”

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