New Delhi: The Enforcement Directorate (ED) on Thursday said the Indian arm of Chinese smartphone maker Vivo and its associated companies "remitted" Rs 62,476 crores out of the total sale proceeds of Rs 1,25,185 crore, almost 50 percent of the turnover, out of India, mainly to China to “avoid paying taxes here”.
Following searches conducted by the ED on Tuesday at 48 locations across the country belonging to VIVO Mobiles India Pvt. Ltd. and its 23 associated companies, including Grand Prospect International Communication Pvt Ltd (GPICPL), the agency said it has seized balance of Rs 465 crore lying in 119 bank accounts, including fixed deposits (FDs) of 66 crore of Vivo India, 2 kg gold bars, and Rs 73 lakh in cash.
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 Registrar of Companies (ROC) Delhi.
GPICPL (Grand Prospects International Communication Pvt. Ltd.) was registered on December 3, 2014 at ROC Shimla, with registered addresses of Solan, Himachal Pradesh and Gandhinagar, Jammu. GPICPL was incorporated by ZhengshenOu, Bin Lou and Zhang Jie with the help of one Nitin Garg, Chartered Accountant. Bin Lou left India on April 26, 2018. ZhengshenOuand Zhang Jie left India in 2021.
Probe under Prevention of Money Laundering Act (PMLA) was initiated by ED on February 3, 2022 on the basis of Kalkaji police station FIR dated December 5, 2021 registered by Delhi Police under IPC Sections relating to cheating and criminal conspiracy against GPICPL and its Director, shareholders and certifying professionals on the basis of complaint filed by Ministry of Corporate Affairs.
As per 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’s investigation revealed that the director of GPICPL, namely Bin Lou, was also a former 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 2014-15 and further another Chinese National Zhixin Wei had incorporated four more companies.
“These companies are found to have transferred huge amounts 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. i.e, almost 50 percent 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 agency said in its statement.
The ED further said, “All due procedures as per law were followed during the said operations at each premise. 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.” (Agencies)
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