NEW DELHI: The money laundering case against Vivo India Limited, the Chinese phone maker, is not a case of mere commission of an economic offence but has been carried out as an attempt to destabilise the financial system of the country and also threaten the integrity and sovereignty of the nation, the Enforcement Directorate has alleged in the Delhi High Court.
Top ED sources related to the probe told The New Indian that the financial probe agency made the disclosure in the Delhi High Court through its counter affidavit that it filed on July 21.
The ED in its affidavit informed the High Court, “The present case is not a case of mere commission of an economic offence but has been carried out as an attempt to destabilise the financial system of the country and also to threaten the integrity and sovereignty of the nation.”
The ED also claimed that all due process of law was followed by the agency after recording proper reason to believe which has been submitted before the Adjudicating Authority. “Thus its action cannot be termed as arbitrary or creating an atmosphere of extreme suspicion,” the agency said.
The financial probe agency’s response came in response to a petition by Vivo seeking permission to allow it to operate its bank accounts. The Chinese company had approached the High Court after ED passed an order on July 5 through which all its bank accounts were frozen.
The ED had carried out searches at 48 locations across the country on the premises linked to Chinese phone maker Vivo and 23 other companies associated with it, including GPICPL, whose directors fled India on July 5 this year.
Following the searches at premises of several companies including Vivo India, the financial probe agency seized 119 bank accounts of various entities with a gross balance to the tune of Rs 465 crore including FDs to the tune of Rs 66 crores of Vivo India, 2kg gold bars, and cash amount to the tune of approximately Rs 73 lakhs under the provisions of Prevention of Money Laundering Act (PMLA).
The ED also said that its money laundering probe has revealed that out of Rs 1,487 crore credited into the accounts of GPICL, approximately Rs 1,20 crore have been transferred to Vivo.
The ED in its counter affidavit also stated that there are 22 companies that are under its probe. ED also said that these firms had transferred huge amounts of funds to Vivo India.
“Further, out of the total sale proceeds of Rs 1,25,185 crore, Vivo India remitted Rs 62,476 crores i.e. almost 50 per cent of the turnover out of India, mainly to China. These remittances were made in order to disclose huge losses by these companies to avoid payment of taxes in India,” the ED claimed.
The ED further stated that 22 companies are held either by foreign nationals or foreign entities based in Hong Kong.
The ED registered a case of money laundering on February 2 this year on the basis of a case registered at Kalkaji police station in Delhi in December last year on the complaint filed by the Ministry of Corporate Affairs against GPICPL and its Director, shareholders and certifying professionals etc.
As per the FIR, GPICPL and its shareholders had used forged identification documents and falsified addresses at the time of incorporation.
“The allegations were found to be true as the investigation revealed that the addresses mentioned by the directors of GPICPL did not belong to them, but in fact, it was a government building and house of a senior bureaucrat,” the ED had said.
“ED’s investigation revealed that the same director of GPICPL, named Bin Lou, was also an ex-director of Vivo. He had incorporated multiple companies across the country spread across various states, a total of 18 companies around the same time, just after the incorporation of Vivo in the year 2014-15 and further another Chinese national Zhixin Wei had incorporated further 4 companies,” the ED had said.
The names of the firms formed by Chinese firms included – Rui Chuang Technologies Private Limited (Ahmedabad), V Dream Technology & Communication Private Ltd (Hyderabad), Regenvo Mobile Private Limited (Lucknow), Fangs Technology Private Limited (Chennai), Weiwo Communication Private Limited (Bangalore), Bubugao Communication Private Limited (Jaipur), Haicheng Mobile (India) Private Limited (New Delhi), Joinmay Mumbai Electronics Pvt. Ltd (Mumbai), Yingjia Communication Private Limited (Kolkata), Jie Lian Mobile India Pvt. Ltd. (Indore), Vigour Mobile India Private Limited (Gurgaon), Hisoa Electronic Private Limited (Pune), Haijin Trade India Private Limited (Kochi), Rongsheng Mobile India Private Limited (Guwahati), Morefun Communication Private Limited (Patna), Aohua Mobile India Private Limited (Raipur), Pioneer Mobile Private Limited (Bhubaneswar), Unimay Electronic Private Limited (Nagpur), Junwei Electronic Private Limited (Aurangabad), Huijin Electronic India Private Limited (Ranchi), MGM Sales Private Limited (Dehradun), Joinmay Electronic Pvt Ltd (Mumbai).
The ED after the searches had claimed that Vivo Mobiles India Pvt Ltd was incorporated on August 1, 2014, as a subsidiary of Multi Accord Ltd, a Hong Kong-based company and was registered at ROC Delhi, while GPICPL was registered on December 3, 2014, at ROC Shimla, with registered addresses of Solan, Himachal Pradesh and Gandhinagar, Jammu.
The ED had said that GPICPL was incorporated by Zhengshen Ou, Bin Lou and Zhang Jie with the help of Nitin Garg, a chartered accountant by profession.
“Bin Lou left India on April 26, 2018, while Zhengshen Ou and Zhang Jie left India in 2021,” the ED had said.