India probes money laundering on 119 Vivo accounts

As part of an investigation into allegations of money laundering by the Chinese smartphone manufacturer, India’s financial crime bureau announced on Thursday that it had frozen 119 bank accounts linked to Vivo’s India business that held 4.65 billion rupees ($58.76 million)

This week, the Enforcement Directorate searched 48 locations of Vivo and its 23 affiliated organizations, alleging that Vivo India’s sale revenues were transferred out of India to reflect losses and evade taxation.

Vivo, which BBK Electronics of China owns, did not react quickly to an inquiry regarding the bank account block.

Vivo stated earlier this week that it was collaborating with authorities and was dedicated to adhering to all Indian regulations.

The directorate claimed that Vivo personnel, including some Chinese nationals, did not assist with the search and “attempted to flee, remove, and conceal digital devices.”

During the raid, the agency also seized two kilograms of gold bars and some cash, according to its statement.

Chinese embassy in India issued an appeal for a fair business climate for its enterprises in response to the news of the raids, stating late Wednesday that India’s multiple investigations into Chinese firms were hurting the confidence of foreign entities investing and operating in the country.

In its investigation of Vivo, the federal agency alleges that the business sent nearly half its total sales of $1.25 trillion ($15.82 billion) to China “to disclose enormous losses in Indian-incorporated entities to evade payment of taxes in India.”

The investigation began in February 2022, according to the statement.

Xiaomi, the market leader in India for smartphones, has also been investigated since February, with the Enforcement Directorate confiscating $725 million from the company’s India bank accounts in April because it had made unlawful remittances abroad “under the pretense of royalty payments.”

Following a lawsuit by Xiaomi, an Indian court has temporarily removed the ban. Xiaomi denies any wrongdoing. The case is still open.

After political tensions escalated following a border conflict in 2020, several Chinese companies have had difficulty conducting business in India. Since then, India has used security concerns to justify the cancellation of more than 300 Chinese applications and has tightened regulations on Chinese investment.

According to Counterpoint Research, Vivo is one of the largest smartphone manufacturers in India, with a 15% market share.

Xiaomi has the largest market share at 24 percent, followed by Samsung Electronics with 18 percent.