'Vivo Siphoned Off Rs 70,000 Crore To China Under Guise Of Imports': ED Files Charge Sheet Against Chinese Mobile Company

The Enforcement Directorate (ED) has made several serious allegations against Chinese mobile company Vivo in a chargesheet, accusing it of siphoning off Rs 70,000 crore from India under the guise of imports.

According to the ED, the operations of Vivo India were being controlled from Room 901 in a Hong Kong building, with Vivo China overseeing the company's activities in India.

The chargesheet claims that "Vivo China monopolised and controlled all the operations of Vivo Mobiles in India through Vivo India and its 23 state distributor companies (SDCs)."

The ED alleges that since 2014, Vivo Mobile India Pvt Ltd has transferred Rs 70,837 crore out of India, disguised as payments for imported goods, which amounts to a total proceeds of crime at nearly Rs 20,241 crore.

These funds were reportedly funneled to overseas trading companies linked to Vivo China, with many of the alleged imports coming from companies based in Hong Kong, Samoa, and the British Virgin Islands.

Further, the ED's chargesheet suggests that Vivo China attempted to conceal its connection with Vivo India to avoid scrutiny by Indian law enforcement.

Despite efforts to create a formal separation on paper, Vivo China allegedly maintained control over Vivo India's supply chain through a corporate veil. The ED contends that all the companies involved were ultimately controlled by Vivo China.

Vivo China is also accused of setting up special purpose vehicles in foreign countries, such as Multi Accord Limited in Hong Kong, to further its interests.

Vivo Mobile India, incorporated on 1 August 2014, is said to have been registered as a subsidiary of Multi Accord, while Vivo China allegedly held shares in Lucky Crest, another Hong Kong entity, which in turn had a stake in Multi Accord.

This structure is presented by the ED as evidence of Vivo China's influence over its Indian operations. Vivo China allegedly created a network of overseas trading companies to obscure the true ownership of these entities.

According to the ED, Vivo India's IT manager Vikas Kumar admitted to reporting directly to a Chinese national who worked from Vivo China's office.

The ED also alleges that Vivo China used an Indian company, Labquest Engineering Pvt Ltd, as a front to engage in retail activities not allowed under India's FDI policy, which restricts 100 per cent FDI in such ventures.

Moreover, Chinese nationals allegedly used another Indian company, Lava International Ltd, to secure invitation letters to enter India without raising suspicion.