The Enforcement Directorate (ED) accuses Vivo of illegally transferring Rs 70,000 crore out of India, pretending it was for imports. The ED report indicates that Vivo India is under Chinese parent company control and its operations in India are being monitored from a Hong Kong-based building.

Vivo’s operations controlled by China

According to the Enforcement Directorate, Vivo India’s operations were controlled from Room 901 in a Hong Kong building. Vivo China had full authority over what Vivo India did in India. The ED's chargesheet says that Vivo China ran the Indian operations through Vivo India and 23 state distributor companies (SDCs). These companies are accused of sending large amounts of money to trading companies connected to Vivo China.

Accuses Vivo of Illegally Transferring
Image Source: Gokulam Seek IAS

The ED further claims that between 2014 and now, Vivo India transferred Rs 70,837 crore out of India, pretending it was for imported goods. The ED says this led to illegal transactions totaling Rs 20,241 crore. The money was allegedly sent to companies in places like Hong Kong, Samoa, and the British Virgin Islands. The Enforcement Directorate believes this was done to conceal Vivo China's control over Vivo India and avoid detection by Indian law enforcement.

The Enforcement Directorate (ED) also accuses Vivo China of trying to hide its link with Vivo India. Even though Vivo China made efforts to appear separate on paper, the ED says it still controlled Vivo India's supply chain through a network of companies. This included special purpose vehicles (SPVs) like Multi Accord Limited, which were set up in foreign countries like Hong Kong.

Vivo Mobile India, which started in 2014, was set up as a subsidiary of Multi Accord, a company connected to Vivo China. This arrangement, according to the ED, helped Vivo China hide its true control over the Indian operations. Vivo China is also accused of using Indian companies like Labquest Engineering Pvt Ltd to carry out retail activities that violate India's foreign direct investment (FDI) rules, which limit 100% foreign investment in such businesses.

Also, claims that Chinese nationals used the Indian company Lava International Ltd. to get invitations and enter India without attracting attention. The ED’s investigation has revealed more details about Vivo India’s complex operations and its connections to Vivo China. The ED suggests that further legal actions may follow as the investigation continues.

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