New Delhi, Oct 10: In a big action against Chinese mobile phone maker vivo India Pvt Ltd, the Enforcement Directorate (ED) has arrested four people, with three executives of the phone maker including a Chinese national and the MD of Lava International in connection with its probe into an alleged money laundering case.
A top ED source told IANS that the agency has arrested four accused who have been identified as Guangwen Kyang aka Andrew Kuang, the Chinese National; Hari Om Rai, the MD of Lava International; Rajan Malik, and Nitin Garg, the Chartered Accountant (CA). They were arrested under the sections of the Prevention of the Money Laundering Act (PMLA).
The source said that the arrest were made after the financial probe agency carried out searches at the premises of the four accused on Monday and recovered cash to the tune of Rs 10 lakh.
The source further said that all the four accused will be produced before a court in Delhi and the agency will demand for their remand.
The fresh arrest comes in the wake of the tensions between India and China amid the border row in Ladakh.
The ED action comes almost more than a year after it carried out searches at 48 locations across the country belonging to vivo Mobiles India Private Limited and its 23 associated companies such as Grand Prospect International Communication Pvt Ltd (GPICPL) and claimed that it has busted a major money laundering racket involving Chinese nationals and multiple Indian companies.
According to the ED, Vivo Mobiles India Pvt Ltd was incorporated on August 1, 2014 as a subsidiary of Multi Accord Ltd, a Hong Kong based company and was registered at ROC Delhi.
GPICPL was registered on December 3, 2014 at ROC Shimla, with registered addresses of Solan, Himachal Pradesh and Gandhinagar, Jammu.
“The said company was incorporated by Zhengshen Ou, Bin Lou and Zhang Jie with the help of Nitin Garg, CA. Bin Lou left India on April 26, 2018. Zhengshen Ou and Zhang Jie left India in 2021,” the financial probe agency had said.
The PMLA investigation by ED was initiated by registering a money laundering case on February 3, 2022 on the basis of an FIR registered at the Kalkaji police station in the national capital by the Delhi Police under sections 417, 120B and 420 of IPC, 1860 against GPICPL and its Director, shareholders and certifying professionals, etc., on the basis of complaint filed by the Ministry of Corporate Affairs.
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 ED’s probe had revealed that the same director of GPICPL, namely Bin Lou, was also an ex-director of Vivo. He had incorporated multiple companies across the country spread across various states, a total of 18 companies around the same time, just after the incorporation of Vivo in the year 2014-15 and further another Chinese National Zhixin Wei had incorporated further 4 companies.
The ED had alleged that these companies are found to have transferred huge amount of funds to Vivo India. “Further, out of the total sale proceeds of Rs 1,25,185 crores, Vivo India remitted Rs 62,476 crores. i.e, almost 50 per cent of the turnover out of India, mainly to China,” the ED had claimed.
“These remittances were made in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India,” it had said.
“Following the searches at multiple locations across the country, the agency had seized 119 bank accounts of various entities with gross balance to the tune of Rs 465 crores including FDs to the tune of 66 crores of Vivo India, 2kg gold bars, and cash amount to the tune of approximately Rs. 73 lakhs,” the ED had said.