This Article is From Jul 05, 2022

Enforcement Directorate Raids Chinese Phone Maker Vivo; Searches At 44 Places

Suspicion of money laundering behind raids on Chinese manufacturing firms; Income Tax Department, too, conducted searches last year

New Delhi:

The Enforcement Directorate today raided Chinese mobile phone manufacturer Vivo and other firms related to it, with searches at 44 locations across India, over allegations of money laundering.

"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," said a spokesperson of the company.

The action is being seen as part of the government's continued crackdown against Chinese entities and their linked Indian operatives indulging in financial crimes. 

The raids today came after the ED filed a money laundering case based on a Delhi Police case against a distributor of the company in Jammu and Kashmir, PTI reported. In that FIR it was alleged that few Chinese shareholders forged their identify documents. The ED suspects this alleged forgery was done to hide illegally generated funds using shell companies and some of these "proceeds of crime" were diverted abroad or put in some other businesses by skirting Indian tax and enforcement agencies.

The Income Tax Department had raided Chinese telecom company Huawei in February and claimed to have found manipulation of account books for reducing taxable income in India.

Premises of a number of these Chinese smartphone companies including Xiaomi, Oppo and Vivo, their distributors and linked associates were raided across the country by Income Tax in December last year, too. Last August, too, Chinese government-controlled telecom vendor ZTE was raided with searches at five premises, including its corporate office.

Vivo has 15 per cent market share in the Indian smartphone segment as of this year, according to market research and analysis firm IDC. According to a research report, Vivo became the top 5G brand in the Rs 10,000-20,000 price bracket segment in the country during the March 2022 quarter.