Delhi, The Enforcement Directorate (ED) has escalated its money laundering probe against Chinese phone manufacturer Vivo, revealing that over ₹1 lakh crore was remitted outside India through shell companies between 2014 and 2021. The charge sheet, filed in a special court, names key figures including Hari Om Rai (Lava International’s founder), Guangwen Kyang alias Andrew Kuang (Chinese national implicated in money laundering for Vivo), Nitin Garg (Vivo’s chartered accountant), and Rajan Malik (Lava’s statutory auditor). Vivo as a company also faces charges under the Prevention of Money Laundering Act (PMLA).
The ED’s investigation, initiated in 2022, uncovered the incorporation of 19 additional companies by Vivo in various cities post its 2014 entry into India. These companies, with Chinese nationals as directors and/or shareholders, controlled the entire supply chain of Vivo Mobiles in India. The FDI policy of 2014-15 allowed 100% foreign investment in single-brand retail under the government route, but Vivo allegedly entered India under the guise of wholesale cash and carry business, avoiding government approval.
ED’s statement in October highlighted Vivo China’s plan to conceal ownership and control, stating, “While no profit was shown from 2014-15 to 2019-20 in statutory filings and no income taxes were paid in India, huge sums were siphoned off out of India.” The investigation revealed a complex network of trading companies used by Vivo to remit funds overseas, maintaining control while evading Indian authorities. Chinese control over Indian entities, especially Vivo India, was evident, with a single individual, Bin Luo, a Chinese national, listed as the founding or first director of Vivo India and 18 other associated entities.
A Vivo spokesperson, responding in October, emphasized adherence to ethical principles and legal compliance. HT has sought comments from Vivo on the recent charge sheet.
