The enforcement directorate (ED) on Thursday revealed that VIVO Mobiles India Pvt Ltd received vast amounts from its 23 associated companies and remitted Rs62,476 crore, or 50% of its sale proceeds out of India, mainly to China to avoid taxes in India. During its search of VIVO Mobiles and the 23 associated companies, ED seized a Rs465 crore balance lying in 119 bank accounts. This includes fixed deposits of Rs66 crore of Vivo, 2kg of gold bars and Rs73 lakh cash.
According to a release, ED has initiated an investigation under the Prevention of Money Laundering Act, 2002 (PMLA) based on a first information report (FIR) registered by Delhi Police against Grand Prospect International Communication Pvt Ltd (GPICPL) and its director, shareholders and certifying professionals based on a complaint filed by the ministry of corporate affairs (MCA).
"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," the agency says.
According to ED, three people, viz., Zhengshen Ou, Bin Lou and Zhang Jie, with the help of Nitin Garg, a chartered accountant (CA) registered GPICPL in December 2014 at the registrar of companies (RoC) at Shimla with registered addresses of Solan in Himachal Pradesh and Gandhinagar at Jammu.
"Bin Lou, an ex-director of Vivo, left India on 26 April 2018. Zhengshen Ou and Zhang Jie left India in 2021," it added.
ED's investigation revealed that Bin Lou had incorporated 18 companies across in various states across India, just after the incorporation of Vivo in FY14-15. Zhixin Wei, another Chinese national, had incorporated four new companies.
These entities are Rui Chuang Technologies Pvt Ltd (Ahmedabad), V Dream Technology & Communication Pvt Ltd (Hyderabad), Regenvo Mobile Pvt Ltd (Lucknow), Fangs Technology Pvt Ltd (Chennai), Weiwo Communication Pvt Ltd (Bangalore), Bubugao Communication Pvt Ltd (Jaipur), Haicheng Mobile (India) Pvt Ltd (New Delhi), Joinmay Mumbai Electronics Pvt Ltd (Mumbai), Yingjia Communication Pvt Ltd (Kolkata), Jie Lian Mobile India Pvt Ltd (Indore), Vigour Mobile India Pvt Ltd (Gurgaon), Hisoa Electronic Pvt Ltd (Pune), Haijin Trade India Pvt Ltd (Kochi), Rongsheng Mobile India Pvt Ltd (Guwahati), Morefun Communication Pvt Ltd (Patna), Aohua Mobile India Pvt Ltd (Raipur), Pioneer Mobile Pvt Ltd (Bhubhaneswar), Unimay Electronic Pvt Ltd (Nagpur), Junwei Electronic Pvt Ltd (Aurangabad), Huijin Electronic India Pvt Ltd (Ranchi), MGM Sales Pvt Ltd (Dehradun) and Joinmay Electronic Pvt Ltd at Mumbai.
ED says, "These companies are found to have transferred a huge amount of funds to Vivo India. Further, out of the total sale proceeds of Rs1,25,185 crore, Vivo India remitted Rs62,476 crore i.e, almost 50% 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."
"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," it added.