THE ENFORCEMENT Directorate has seized assets worth over Rs 465 belonging to Chinese mobile manufacturer Vivo and its associate entities in connection with its money laundering probe into the company’s finances. The agency has claimed that a former director of Vivo had opened multiple shell companies which were used to launder money for Vivo.
In one of the companies, the ED has claimed, the address provided was that of a bureaucrat.
The agency said on Thursday it had searched 48 locations spanning across the country belonging to Vivo Mobiles India Private Limited and its 23 associated companies such as M/s Grand Prospect International Communication Pvt Ltd (GPICPL) on Tuesday.
According to the ED, 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 at ROC Delhi. GPICPL was registered on December 3, 2014 at ROC Shimla, with registered addresses of Solan, Himachal Pradesh and Gandhinagar, Jammu.
The ED claimed that GPICPL was incorporated by Zhengshen Ou, Bin Lou and Zhang Jie with the help of one Nitin Garg, a chartered accountant. Bin Lou left India on April 26, 2018. Zhengshen Ou and Zhang Jie left India in 2021.
“ED’s investigation revealed that the same director of GPICPL, namely Bin Lou, 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 and further another Chinese National Zhixin Wei had incorporated further 4 companies,” an ED statement said.
In a statement earlier, a Vivo spokesperson said: “Vivo is cooperating with the authorities to provide them with all required information. As a responsible corporate, we are committed to be fully compliant with laws.”
The ED claimed that these companies have transferred huge amount of funds to Vivo India. “Further, out of the total sale proceeds of Rs 1,25,185 crore, Vivo India remitted Rs 62,476 crore. i.e, 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,” the ED said.
According to the agency, so far, 119 bank accounts of various entities with gross balance to the tune of Rs 465 crore, including FDs to the tune of Rs 66 crore of Vivo India, 2kg gold bars, and cash amount to the tune of approximately Rs 73 lakh have been seized under the provisions of PMLA, 2002.
The ED case is based on a Delhi Police FIR of February against GPICPL where its shareholders had been found to 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,” the ED said.
The ED has identified entities floated by some former directors and others as as 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), Joinmay Electronic Pvt Ltd (Mumbai).