Smartphone maker Vivo has illegally transferred a whopping Rs 62,476 crore to China in order to avoid payment of taxes in India, the Enforcement Directorate said on Thursday, PTI reported.
ED claims that it has busted a major money laundering racket involving Chinese nationals and multiple Indian companies.
This money is almost half of Vivo’s turnover of Rs 125,185 crore, ED said without stating the time period of the transaction.
The crackdown on the leading Chinese company came after the federal probe agency found that three Chinese nationals, all of whom left India during 2018-21, and one other person from that country incorporated as many as 23 companies in India in which they were also helped by a Chartered Accountant, Nitin Garg.
Among the foreigners, one identified as Bin Lou was an ex-director of Vivo and, according to the ED, he left India in April, 2018. Two others — Zhengshen Ou and Zhang Jie — left the country in 2021, it said.
“These 23 companies are found to have transferred huge amounts of funds to Vivo India. Further, out of the total sale proceeds of Rs 125,185 crore, Vivo India remitted Rs 62,476 crore or almost 50 percent of the turnover out of India, mainly to China,” the ED said in a statement.
These remittances were made in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India. The action is being seen as part of the Union government’s steps to tighten checks on Chinese entities and the crackdown on such firms and their linked Indian operatives that are indulging in serious financial crimes like money laundering and tax evasion while operating here.
ED raided 48 locations of Vivo Mobiles India and its associated companies across the country on July 5.
Vivo had said on Tuesday that “as a responsible corporate, we are committed to be fully compliant with laws.”
The ED said post the raids, it seized funds worth Rs 465 crore kept in 119 bank accounts by various entities involved in the case, Rs 73 lakh cash and 2 kg gold bars.