Enforcement Directorate has seized 456 crore under the Money Laundering Prevention Act from 119 bank accounts of phone maker Vivo India after it was found that Grand Prospect International Communication Pvt. In a statement on Thursday, the agency said, a unit of Vivo India Ltd and its shareholders had used forged identity documents and false addresses at the time of incorporation.
“Till now, 119 bank accounts of various entities with gross balances” 465 crore including fixed deposit 66 crores of Vivo India, 2 kg of gold bars, and almost cash amount 73 lakh rupees have been seized under the provisions of PMLA, 2002.
The statement was made after the enforcement agency conducted searches on July 5 at 48 locations across the country belonging to Vivo Mobiles India Pvt. Ltd. and its 23 affiliated companies, such as Grand Prospect International Communication Pvt. Ltd. (GPICPL).
The agency said that the PMLA probe by the ED was initiated after a first information report was filed by the Delhi Police against Grand Prospect International Communication Pvt Ltd. Ltd. and its directors, shareholders and certified professionals on the basis of a complaint filed by the Ministry of Corporate Affairs.
“As per the First Information Report (FIR) (by Ministry of Corporate Affairs), M/s Grand Prospect International Communication Pvt. Ltd. and its shareholders had used forged identity documents and forged addresses at the time of incorporation. The allegations were found to be true as investigation revealed that the addresses mentioned by the directors of Grand Prospect International Communication Pvt. Ltd. did not belong to them, but in fact, it was a government building and was the home of a senior bureaucrat,” the agency said.
During investigation, the Enforcement Directorate found that a director of the subsidiary and a Chinese national set up 22 companies and transferred huge funds to Vivo India.
Enforcement Directorate found that almost half of the total sale proceeds 1.25 trillion was sent by Vivo India, mainly to China, to show huge losses in Indian incorporated companies to avoid paying taxes in India.
The Enforcement Directorate investigation has revealed that the directors of Grand Prospect International Communication Pvt. Ltd., Bin Lu, who was also a former director of Vivo, incorporated 18 companies spread across different states across the country just after Vivo’s incorporation in the year 2014-15 and another Chinese national, Zhixin Wei, incorporated four companies. was included. ,
“These companies have transferred huge amount of funds to Vivo India. In addition, out of the total sales proceeds 1,25,185 crore, sent to Vivo India 62,476 crore, i.e. about 50% of the business outside India, mainly to China. These remittances were made to disclose huge losses in Indian incorporated companies to evade payment of taxes in India,” the agency said.
The agency said Grand Prospect International Communication Pvt. Ltd. was registered on 3 December 2014 at Registrar of Companies in Shimla with the registered address of Solan, Himachal Pradesh and Gandhinagar, Jammu.
The agency said that Zhengshen Ou, Bin Lu and Zhang Ji with the help of a chartered accountant Nitin Garg, Bin Lu left India on 26 April 2018, while Zhengshen Ou and Zhang Jie left India in 2021.
The agency further said that all due process as per law was followed during the seizure operation in each of the premises. It added, “The employees of Vivo India, including some Chinese nationals, did not cooperate with the search process and tried to dismantle, dismantle and hide the digital devices, which were retrieved by the search teams.”
Meanwhile, India’s foreign ministry said on Thursday – a day after China responded to an ongoing investigation by Vivo into alleged irregularities – that Chinese companies operating in India need to obey the law of the land.
A spokesperson of the Chinese Embassy said on Wednesday that the continuous investigation by Indian authorities into Chinese enterprises not only disrupts their normal business activities and damages their goodwill but also disrupts the business environment in India.
PTI contributed to the story.