The Enforcement Directorate (ED) conducted raids at more than 40 places across the country on Tuesday and Wednesday. India Money laundering probe against Chinese smartphone maker Vivo and related firms. The ED also said on Thursday that the company’s Indian arm “remitted” about 50 per cent of its turnover, amounting to Rs 62,476 crore, to China to evade taxes here. China has also replied that they expect a fair investigation. Here is the whole matter:
What is the matter?
In a money laundering case, the ED raided the premises of Vivo and its related companies including Xiaomi and Oppo. It took cognizance of the recent FIR of Delhi Police (Economic Offenses Wing) against a distributor of the agency based in Jammu and Kashmir, where it was alleged that some Chinese shareholders of that company had forged their identity documents.
The ED suspects that this alleged forgery was done by using shell or paper companies to launder illegally generated funds and divert some of these “proceeds of crime” to remain under the radar of Indian tax and enforcement agencies. it was done.
The ED on Thursday said the Indian unit of Chinese smartphone maker Vivo “remitted” about 50 per cent of its turnover, amounting to Rs 62,476 crore, to China mainly to avoid paying taxes here. The federal probe agency also said that it has seized Rs 465 crore, Rs 73 lakh in cash and 2 kg of gold held in 119 bank accounts by various entities following the pan-India raids against Vivo Mobile that were launched on July 5 earlier this week. The sticks have been confiscated. India Pvt. Ltd. and its 23 affiliated companies.
Is this the first time these Chinese companies are under scrutiny?
The premises of several of these Chinese smartphone companies, including Xiaomi, Oppo and Vivo, their distributors and affiliated affiliates were raided across the country by the IT department in December last year and later to unearth alleged unaccounted income of over Rs 6,500 crore. was claimed. For violation of Indian tax law and regulations.
The crackdown is being seen as part of the central government’s crackdown on Chinese entities and continued crackdown on such firms and their associated Indian operatives who allegedly indulged in serious financial crimes such as money laundering and tax evasion while working here. Huh.
The action to take action against Chinese-backed companies or entities operating in India also comes in the backdrop of the military standoff between the two countries along the Line of Actual Control (LAC) in eastern Ladakh, which has been going on for more than two years. year now.
How has China reacted?
Chinese Foreign Ministry spokesman Zhao Lijian said at a media briefing, “As I have emphasized many times, the Chinese government has always asked Chinese companies to comply with laws and regulations when doing business abroad … Meanwhile, we strongly support Chinese companies in protecting their legitimate rights and interests.”
“We hope that Indian authorities will comply with the laws as they conduct investigations and enforcement activities and provide a truly fair, equitable and non-discriminatory business environment for Chinese companies that invest and operate in India,” the spokesperson said. Huh.”
According to market research and analysis firm IDC, Vivo had a 15% market share in the Indian smartphone segment in the first quarter of 2022 and shipped 5.5 million devices. According to a research report by Counterpoint, Vivo became the top 5G brand in the Rs 10,000-20,000 price bracket segment in the country during the March 2022 quarter.
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