India’s anti-money laundering agency said on Thursday that it seized 119 bank accounts containing 4.65 billion rupees ($58.75 million) from Indian businesses linked with Chinese smartphone maker Vivo for tax evasion.
The Indian Enforcement Directorate said that Vivo India remitted 62.47 billion rupees ($7.9 million), or almost 50 percent, of its total turnover outside the country, mainly to China.
It conducted searches in 48 locations belonging to Vivo India and 23 related entities on July 5, after an initial probe found that shareholders used “forged identification documents and falsified addresses at the time of incorporation.”
Vivo India’s employees, including some Chinese nationals, did not cooperate with the search proceedings and had attempted to “abscond, remove and hide digital devices,” the directorate said.
It also claimed that the addresses provided by the directors of Grand Prospect International Communication—one of Vivo India’s shareholders—were a government building and the residence of a top bureaucrat.
Vivo India was incorporated in August 2014 as a subsidiary of Hong Kong-based Multi Accord Ltd. All of its three directors, Zhengshen Ou, Bin Lou, and Zhang Jie, fled India in 2018 and 2021, according to the directorate.
Chinese Embassy Response
The Chinese Embassy in India criticized Indian authorities for “the frequent investigations” into Chinese firms, saying that such moves “impede the improvement of business environment in India” and “chill the confidence and willingness” of businesses from other countries.The investigation on Vivo India comes after the directorate raided Chinese smartphone maker Xiaomi in May, and seized $725 million over the company’s illegal remittances to three foreign-based entities in the guise of royalty payments.
Xiaomi later stated that its royalty payments were “legit and truthful” as they were used “for in-licenses technologies and IPs used in our Indian version products.”
