On Tuesday (October 10), the Enforcement Directorate (ED) arrested four people in connection with the money laundering case against smartphone maker Vivo. These include Hari Om Rai, managing director of Lava International Company, Andrew Kuang, a Chinese national, and two accountants. ED claimed that Vivo had redirected around $13 billion out of India for tax evasion.
Vivo officials entered India hiding their employment information
According to a report, ED has accused Vivo officials of entering restricted Indian regions like Jammu and Kashmir by violating visa conditions. In a court filing, ED reveals that at least 30 Chinese obtained Indian visas to do business in the country, but established ties with Vivo.
These individuals then traveled to sensitive areas of the country, such as Ladakh, Jammu and Kashmir, without having the required authorization, raising further concerns. A report by Wion News mentions that Vivo has not shown any profit in the statutory returns from 2014-15 to 2019-20 and, therefore, has not paid any income tax to the Indian government.
As of July 2022, ED estimated that Vivo had funneled around $7.5 billion out of the country, mainly to China. Vivo India responded by stating that it was committed to complying with the law. However, this alleged scandal could represent a turning point in the Indian government’s policy towards Chinese investments and companies.
In recent times, Sino-Indian relations have not been the best, neither geopolitically nor diplomatically. We have witnessed tensions at the border, as well as political clashes. The Ministry of Electronics and Information Technology has banned over 200 Chinese mobile apps in India. The Vivo scandal will not provide the best insight into the Chinese smartphone maker, which has the second largest market share in India.
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