Vivo directors flee from India as ED intensifies searches

Vivo directors Zhengshen Ou and Zhang Jie have reportedly fled from India as the Enforcement Directorate (ED) has intensified inquiry into the money laundering case against the Chinese firm.

The Enforcement Directorate had conducted searches at 40 places of Vivo Communication across the country in a money-laundering investigation against Chinese smartphone manufacturing company Vivo and related firms on Tuesday, 5 July.

The federal agency carried out searches under sections of the Prevention of Money Laundering Act (PMLA). The Central Bureau of Investigation is already probing the money laundering charges that are levied against Vivo.

The searches were carried out in in Uttar Pradesh, Madhya Pradesh and other southern states in connection with a case linked to Vivo Mobile Communications and some other Chinese firms.

The IT department in India, as well as the Ministry of Corporate Affairs (MCA), is also keeping a close eye on the Chinese manufacturing firms. The raid being conducted by the Ed is an extension of the ongoing probe against the Chinese firms.

People familiar with the situation has said that local units of Vivo Mobile Communications are under the radar for alleged financial improprieties as part of an investigation into other China-based firms.

The Ministry of Corporate Affairs is learnt to have a special focus on potential violations including fraud.

In the case of Vivo, an inquiry was sought in April this year to detect if there were “significant irregularities in ownership and financial reporting”.

China on Wednesday expressed hope that India will conduct the ongoing investigations into the Chinese mobile manufacturer firm Vivo in accordance with the law and regulations and provide a ” truly fair” and “non-discriminatory” business environment to China’s firms.

The Indian government’s crackdown on the Chinese firms comes in the backdrop of the unresolved tension and military stand-off along the Line of Actual Control (LAC) in eastern Ladakh that has been going on for more than two years now.

The action seems to be a part of the Union government’s steps to tighten checks on Chinese entities and the continued crackdown on such firms and their linked Indian operatives that are allegedly indulging in serious financial crimes like money laundering and tax evasion while operating in India. Livemint