The Enforcement Directorate (ED) has arrested four individuals, including the chairman and managing director of Lava International, a Chinese national, and a chartered accountant, in connection with a money laundering probe against Chinese phone maker Vivo.
The ED's investigation under the Prevention of Money Laundering Act (PMLA) revealed that Vivo had incorporated 19 companies in India with Chinese nationals as directors and shareholders, controlling the supply chain of Vivo mobile phones in the country.
The ED alleged that Vivo entered India under the guise of wholesale cash and carry business to avoid government approval. The agency had previously raided Vivo's offices and associate companies, alleging that the company had illegally transferred ₹62,476 crore to China to evade taxes in India. The ED now claims that Vivo has remitted over ₹1 lakh crore out of India since 2014 to trading companies hired to conceal Vivo China's control over these local firms.
The ED's investigation also revealed that the network of Vivo companies communicated through Chinese applications and stored data on servers in China. The agency stated that Chinese control over Indian entities was concealed from Indian authorities and described the operation as a well-planned, multi-layered criminal conspiracy.
The ED highlighted the role of Hari Om Rai, founder and managing director of Lava International, in assisting Vivo and cheating the Indian government. Rai allegedly facilitated the setup of a Chinese-controlled network throughout India and helped Chinese nationals associated with Vivo acquire office and residential spaces. The ED also found that Chinese nationals associated with Vivo had been travelling across India, including sensitive areas in J&K and Ladakh, in violation of Indian visa conditions.
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