The Enforcement Directorate (ED) has reportedly arrested four executives of Chinese mobile manufacturer Vivo Mobile India Pvt. Ltd. Among those arrested, a Chinese national has also been held by the government's financial fraud agency. The latest arrests pertain to the ED's ongoing probe into the 2022 money laundering case against the company.
Though Vivo Mobile India has not come up with an official statement on this yet, it has consistently denied the ED allegations, saying it’s fully compliant with all the existing laws of the country.
The Enforcement Director probe last year alleged that Vivo India remitted about ₹62,476 crore -- almost 50% of its turnover of ₹1,25,185 crore -- out of India, mainly to China. The probe agency had also seized ₹465 crore, including fixed deposits (FDs), to the tune of ₹66 crore of Vivo India, 2kg gold bars, and cash amount aggregating to around ₹73 lakh under the provisions of Prevention of Money Laundering Act (PMLA), 2002.
The finance ministry's directorate of revenue intelligence (DRI) in August 2022 also detected customs duty evasion of around ₹2,217 crore by Vivo. As part of the probe, searches were conducted by DRI officers at the factory premises of Vivo India, which led to the recovery of incriminating evidence indicating wilful mis-declaration in the description of certain items imported by Vivo India, for use in the manufacture of mobile phones.
Vivo Mobiles India was incorporated in August 2014 as a subsidiary of Multi Accord Ltd, a Hong Kong-based company, and was registered at the Registrar of Companies (ROC)-Delhi.
A Raja's 15 properties seized
The ED has taken possession of 15 immovable properties owned by A. Raja, former Union cabinet minister of environment and forest in the name of his benami company Kovai Shelters Promoters India Pvt Ltd, under the provisions of PMLA, 2002, in the matter of disproportionate assets case.
The ED says its investigation revealed A. Raja, during his tenure as minister of environment & forests (2004 to 2007), granted environmental clearances to a real estate company, based out of Gurugram (one of the largest real estate companies in the country, also listed on BSE).
The ED says the real-estate company gave "kickback to A. Raja as quid pro quo" for awarding the environmental clearance around the same period in the year 2007, in the garb of land commission income in the hands of his benami company.
Raja had incorporated the company in 2007 in the name of his family members and his close family friend, allegedly with the "sole objective of using it as a vehicle to park the proceeds of crime".
The ED says the said company never engaged in any business activity since its inception.
The ED says its probe established that the properties measuring 45 acres of land in Coimbatore, Tamil Nadu (worth around Rs 55 crore) were purchased directly using the proceeds of crime generated by Raja.
"Therefore, in order to prevent the accused and his benamis from enjoying such properties, the ED has invoked the provisions of Section 8(4) of PMLA and taken possession of the properties attached vide Provisional Attachment Order dated 20.12.2022, which was subsequently confirmed by the Hon’ble Adjudicating Authority (PMLA), Delhi vide order dated 01.06.2023," says the ED, adding that the further probe is under progress.
