India completes money-laundering investigation against Vivo

Jingyue Hsiao, DIGITIMES Asia, Taipei 0

Credit: AFP

The Indian government has completed the money-laundering investigation against Vivo, accusing the company of illegally transferring INR624.76 billion (US7.5 billion) abroad through shell companies.

According to PTI and Mint, the Enforcement Directorate of India filed its first charge sheet against Vivo after completing its investigation into the money-laundering case involving Vivo and a few shell companies.

In October, India arrested four people, including Hari Om Rai, co-founder and managing director of Lava, Chinese national Guangwen alias Andrew Kuang, and chartered accountants Nitin Garg and Rajan Malik, alleging them of cheating the government by entering India in a disguised and fraudulent manner to set up an elaborate Chinese-controlled network throughout India and carrying activities prejudicial to the economic sovereignty of the country.

As per the reports, the four individuals who were arrested established 23 companies in India. These companies were discovered to have transferred substantial sums to Vivo India. From the overall sales amounting to INR1,251.85 billion, Vivo remitted INR624.76 billion, which accounts for around 50% of the turnover outside India, to evade tax payments within the country.

Vivo, along with other China-based smartphone vendors, accounted for more than 70% of the smartphone market in India. However, China-based companies are believed to contribute little to the Indian economy. Vivo and Xiaomi were accused of tax or basic customs evasion, and most of India's smartphone exports are attributed to Samsung Electronics and Apple suppliers.

In recent years, multiple Indian media outlets have reported that India has been trying to urge China-based vendors to form joint ventures with Indian manufacturers, partner with local partners in distribution networks, and ramp up their smartphone exports. A couple of days ago, Dixon inaugurated a manufacturing facility in Noida to make Xiaomi smartphones with an annual production capacity of 25 million units, the first time Xiaomi outsourced its smartphone manufacturing to an India-based electronics manufacturer.