New Delhi: The Enforcement Directorate (ED) has submitted a supplementary chargesheet against Vivo China. The chargesheet accuses Vivo China of controlling and monopolizing the operations of Vivo Mobiles in India through Vivo India and its 23 state distributor companies. The ED claims that Vivo China has funnelled Rs 70,000 crore out of India under the pretext of imports.
The Indian Express article details that since 2014, Vivo Mobile Pvt Ltd has transferred Rs 70,837 crore out of India for imports from companies located in Hong Kong, Samoa, and the British Virgin Islands. These companies are purportedly under Vivo China’s control, with the import transactions amounting to nearly Rs 20,241 crore. The ED also contends that Vivo China attempted to obscure its connection with Vivo India by creating a separation on paper while still overseeing the supply chain, asserting that all related companies were under the singular control of Vivo China.
The central probe agency has reported that Vivo China established special purpose vehicles (SPVs) in various countries, holding stakes through different companies. For instance, Vivo Mobile India was listed as a subsidiary of Multi Accord Limited, based in Hong Kong. Vivo China held a stake in Lucky Crest, another entity registered in Hong Kong, which in turn was a shareholder of Multi Accord. According to the ED, this complex network allowed Vivo China to exert control over Vivo India.
The chargesheet indicates that Vivo India and its 23 state distributor companies (SDCs) deliberately misrepresented their beneficial ownership to the Indian authorities. These trading entities were located in the Yip Fung Building in Hong Kong. The ED accuses Vivo China of utilizing an Indian firm named Labquest Engineering as a facade to conduct retail business operations, contravening India’s FDI regulations. In December 2023, the ED detained seven individuals linked to a money-laundering investigation involving Vivo India.
